Correlation Between ADHI KARYA and Yuexiu Transport
Can any of the company-specific risk be diversified away by investing in both ADHI KARYA and Yuexiu Transport 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 ADHI KARYA and Yuexiu Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADHI KARYA and Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on ADHI KARYA and Yuexiu Transport 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 ADHI KARYA with a short position of Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADHI KARYA and Yuexiu Transport.
Diversification Opportunities for ADHI KARYA and Yuexiu Transport
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ADHI and Yuexiu is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding ADHI KARYA and Yuexiu Transport Infrastructur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuexiu Transport Inf and ADHI KARYA 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 ADHI KARYA are associated (or correlated) with Yuexiu Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuexiu Transport Inf has no effect on the direction of ADHI KARYA i.e., ADHI KARYA and Yuexiu Transport go up and down completely randomly.
Pair Corralation between ADHI KARYA and Yuexiu Transport
Assuming the 90 days trading horizon ADHI KARYA is expected to under-perform the Yuexiu Transport. In addition to that, ADHI KARYA is 1.38 times more volatile than Yuexiu Transport Infrastructure. It trades about 0.0 of its total potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about 0.07 per unit of volatility. If you would invest 15.00 in Yuexiu Transport Infrastructure on October 19, 2024 and sell it today you would earn a total of 30.00 from holding Yuexiu Transport Infrastructure or generate 200.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADHI KARYA vs. Yuexiu Transport Infrastructur
Performance |
| Timeline |
| ADHI KARYA |
| Yuexiu Transport Inf |
ADHI KARYA and Yuexiu Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADHI KARYA and Yuexiu Transport
The main advantage of trading using opposite ADHI KARYA and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADHI KARYA position performs unexpectedly, Yuexiu Transport 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 Yuexiu Transport will offset losses from the drop in Yuexiu Transport's long position.The idea behind ADHI KARYA and Yuexiu Transport Infrastructure pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Yuexiu Transport vs. ARDAGH METAL PACDL 0001 | Yuexiu Transport vs. GREENX METALS LTD | Yuexiu Transport vs. Western Copper and | Yuexiu Transport vs. Comba Telecom Systems |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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