Correlation Between Yuexiu Transport and Insteel Industries
Can any of the company-specific risk be diversified away by investing in both Yuexiu Transport and Insteel Industries 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 Insteel Industries 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 Insteel Industries, you can compare the effects of market volatilities on Yuexiu Transport and Insteel Industries 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 Insteel Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuexiu Transport and Insteel Industries.
Diversification Opportunities for Yuexiu Transport and Insteel Industries
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yuexiu and Insteel is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and Insteel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insteel Industries 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 Insteel Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insteel Industries has no effect on the direction of Yuexiu Transport i.e., Yuexiu Transport and Insteel Industries go up and down completely randomly.
Pair Corralation between Yuexiu Transport and Insteel Industries
Assuming the 90 days horizon Yuexiu Transport Infrastructure is expected to generate 1.28 times more return on investment than Insteel Industries. However, Yuexiu Transport is 1.28 times more volatile than Insteel Industries. It trades about 0.09 of its potential returns per unit of risk. Insteel Industries is currently generating about 0.02 per unit of risk. If you would invest 19.00 in Yuexiu Transport Infrastructure on September 14, 2024 and sell it today you would earn a total of 39.00 from holding Yuexiu Transport Infrastructure or generate 205.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Yuexiu Transport Infrastructur vs. Insteel Industries
Performance |
| Timeline |
| Yuexiu Transport Inf |
| Insteel Industries |
Yuexiu Transport and Insteel Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuexiu Transport and Insteel Industries
The main advantage of trading using opposite Yuexiu Transport and Insteel Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuexiu Transport position performs unexpectedly, Insteel Industries 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 Insteel Industries will offset losses from the drop in Insteel Industries' long position.| Yuexiu Transport vs. Zhejiang Expressway Co | Yuexiu Transport vs. Jiangsu Expressway Co | Yuexiu Transport vs. Jiangsu Expressway | Yuexiu Transport vs. Verra Mobility Corp |
| Insteel Industries vs. Mayville Engineering Co | Insteel Industries vs. Gulf Island Fabrication | Insteel Industries vs. ESAB Corp | Insteel Industries vs. Northwest Pipe |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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