Correlation Between YARA INTL and China BlueChemical
Can any of the company-specific risk be diversified away by investing in both YARA INTL and China BlueChemical 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 YARA INTL and China BlueChemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YARA INTL ASA and China BlueChemical, you can compare the effects of market volatilities on YARA INTL and China BlueChemical 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 YARA INTL with a short position of China BlueChemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of YARA INTL and China BlueChemical.
Diversification Opportunities for YARA INTL and China BlueChemical
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between YARA and China is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding YARA INTL ASA and China BlueChemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China BlueChemical and YARA INTL 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 YARA INTL ASA are associated (or correlated) with China BlueChemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China BlueChemical has no effect on the direction of YARA INTL i.e., YARA INTL and China BlueChemical go up and down completely randomly.
Pair Corralation between YARA INTL and China BlueChemical
Assuming the 90 days trading horizon YARA INTL ASA is expected to under-perform the China BlueChemical. But the stock apears to be less risky and, when comparing its historical volatility, YARA INTL ASA is 2.09 times less risky than China BlueChemical. The stock trades about -0.02 of its potential returns per unit of risk. The China BlueChemical is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 20.00 in China BlueChemical on August 28, 2024 and sell it today you would earn a total of 3.00 from holding China BlueChemical or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.72% |
| Values | Daily Returns |
YARA INTL ASA vs. China BlueChemical
Performance |
| Timeline |
| YARA INTL ASA |
| China BlueChemical |
YARA INTL and China BlueChemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YARA INTL and China BlueChemical
The main advantage of trading using opposite YARA INTL and China BlueChemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YARA INTL position performs unexpectedly, China BlueChemical 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 China BlueChemical will offset losses from the drop in China BlueChemical's long position.| YARA INTL vs. Superior Plus Corp | YARA INTL vs. NMI Holdings | YARA INTL vs. Origin Agritech | YARA INTL vs. SIVERS SEMICONDUCTORS AB |
| China BlueChemical vs. CONAGRA FOODS | China BlueChemical vs. Clean Energy Fuels | China BlueChemical vs. Lifeway Foods | China BlueChemical vs. Austevoll Seafood ASA |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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