Correlation Between Yuexiu Transport and Nature Wood
Can any of the company-specific risk be diversified away by investing in both Yuexiu Transport and Nature Wood 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 Nature Wood 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 Nature Wood Group, you can compare the effects of market volatilities on Yuexiu Transport and Nature Wood 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 Nature Wood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuexiu Transport and Nature Wood.
Diversification Opportunities for Yuexiu Transport and Nature Wood
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yuexiu and Nature is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and Nature Wood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nature Wood Group 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 Nature Wood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nature Wood Group has no effect on the direction of Yuexiu Transport i.e., Yuexiu Transport and Nature Wood go up and down completely randomly.
Pair Corralation between Yuexiu Transport and Nature Wood
Assuming the 90 days horizon Yuexiu Transport Infrastructure is expected to generate 1.6 times more return on investment than Nature Wood. However, Yuexiu Transport is 1.6 times more volatile than Nature Wood Group. It trades about 0.23 of its potential returns per unit of risk. Nature Wood Group is currently generating about -0.03 per unit of risk. If you would invest 45.00 in Yuexiu Transport Infrastructure on September 1, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuexiu Transport Infrastructur vs. Nature Wood Group
Performance |
| Timeline |
| Yuexiu Transport Inf |
| Nature Wood Group |
Yuexiu Transport and Nature Wood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuexiu Transport and Nature Wood
The main advantage of trading using opposite Yuexiu Transport and Nature Wood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuexiu Transport position performs unexpectedly, Nature Wood 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 Nature Wood will offset losses from the drop in Nature Wood's long position.| Yuexiu Transport vs. Verra Mobility Corp | Yuexiu Transport vs. HUMANA INC | Yuexiu Transport vs. SCOR PK | Yuexiu Transport vs. Aquagold International |
| Nature Wood vs. NETGEAR | Nature Wood vs. Chester Mining | Nature Wood vs. Highway Holdings Limited | Nature Wood vs. Inflection Point Acquisition |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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