Correlation Between Yuexiu Transport and HUTCHMED DRC
Can any of the company-specific risk be diversified away by investing in both Yuexiu Transport and HUTCHMED DRC at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Yuexiu Transport and HUTCHMED DRC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuexiu Transport Infrastructure and HUTCHMED DRC, you can compare the effects of market volatilities on Yuexiu Transport and HUTCHMED DRC and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Yuexiu Transport with a short position of HUTCHMED DRC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuexiu Transport and HUTCHMED DRC.
Diversification Opportunities for Yuexiu Transport and HUTCHMED DRC
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yuexiu and HUTCHMED is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and HUTCHMED DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUTCHMED DRC and Yuexiu Transport is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Yuexiu Transport Infrastructure are associated (or correlated) with HUTCHMED DRC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUTCHMED DRC has no effect on the direction of Yuexiu Transport i.e., Yuexiu Transport and HUTCHMED DRC go up and down completely randomly.
Pair Corralation between Yuexiu Transport and HUTCHMED DRC
Assuming the 90 days horizon Yuexiu Transport Infrastructure is expected to generate 2.0 times more return on investment than HUTCHMED DRC. However, Yuexiu Transport is 2.0 times more volatile than HUTCHMED DRC. It trades about 0.23 of its potential returns per unit of risk. HUTCHMED DRC is currently generating about -0.03 per unit of risk. If you would invest 45.00 in Yuexiu Transport Infrastructure on August 31, 2024 and sell it today you would earn a total of 13.00 from holding Yuexiu Transport Infrastructure or generate 28.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuexiu Transport Infrastructur vs. HUTCHMED DRC
Performance |
| Timeline |
| Yuexiu Transport Inf |
| HUTCHMED DRC |
Yuexiu Transport and HUTCHMED DRC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuexiu Transport and HUTCHMED DRC
The main advantage of trading using opposite Yuexiu Transport and HUTCHMED DRC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuexiu Transport position performs unexpectedly, HUTCHMED DRC can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in HUTCHMED DRC will offset losses from the drop in HUTCHMED DRC's long position.| Yuexiu Transport vs. Verra Mobility Corp | Yuexiu Transport vs. HUMANA INC | Yuexiu Transport vs. SCOR PK | Yuexiu Transport vs. Aquagold International |
| HUTCHMED DRC vs. Bausch Health Companies | HUTCHMED DRC vs. Haleon plc | HUTCHMED DRC vs. Intracellular Th | HUTCHMED DRC vs. Amphastar P |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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