Correlation Between Yuexiu Transport and Lagardere
Can any of the company-specific risk be diversified away by investing in both Yuexiu Transport and Lagardere 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 Lagardere 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 Lagardere SA, you can compare the effects of market volatilities on Yuexiu Transport and Lagardere 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 Lagardere. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuexiu Transport and Lagardere.
Diversification Opportunities for Yuexiu Transport and Lagardere
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yuexiu and Lagardere is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and Lagardere SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lagardere SA 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 Lagardere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lagardere SA has no effect on the direction of Yuexiu Transport i.e., Yuexiu Transport and Lagardere go up and down completely randomly.
Pair Corralation between Yuexiu Transport and Lagardere
Assuming the 90 days horizon Yuexiu Transport Infrastructure is expected to generate 2.4 times more return on investment than Lagardere. However, Yuexiu Transport is 2.4 times more volatile than Lagardere SA. It trades about 0.1 of its potential returns per unit of risk. Lagardere SA is currently generating about 0.03 per unit of risk. If you would invest 32.00 in Yuexiu Transport Infrastructure on November 2, 2024 and sell it today you would earn a total of 26.00 from holding Yuexiu Transport Infrastructure or generate 81.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 87.45% |
| Values | Daily Returns |
Yuexiu Transport Infrastructur vs. Lagardere SA
Performance |
| Timeline |
| Yuexiu Transport Inf |
| Lagardere SA |
Yuexiu Transport and Lagardere Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuexiu Transport and Lagardere
The main advantage of trading using opposite Yuexiu Transport and Lagardere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuexiu Transport position performs unexpectedly, Lagardere 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 Lagardere will offset losses from the drop in Lagardere's 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 |
| Lagardere vs. International Consolidated Airlines | Lagardere vs. Alaska Air Group | Lagardere vs. LATAM Airlines Group | Lagardere vs. Allegiant Travel |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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