Correlation Between Saia and Yuexiu Transport
Can any of the company-specific risk be diversified away by investing in both Saia 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 Saia and Yuexiu Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saia Inc and Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on Saia 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 Saia with a short position of Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saia and Yuexiu Transport.
Diversification Opportunities for Saia and Yuexiu Transport
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Saia and Yuexiu is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Saia Inc 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 Saia 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 Saia Inc 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 Saia i.e., Saia and Yuexiu Transport go up and down completely randomly.
Pair Corralation between Saia and Yuexiu Transport
Given the investment horizon of 90 days Saia is expected to generate 1.74 times less return on investment than Yuexiu Transport. But when comparing it to its historical volatility, Saia Inc is 1.6 times less risky than Yuexiu Transport. It trades about 0.21 of its potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 45.00 in Yuexiu Transport Infrastructure on August 27, 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 Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saia Inc vs. Yuexiu Transport Infrastructur
Performance |
| Timeline |
| Saia Inc |
| Yuexiu Transport Inf |
Saia and Yuexiu Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saia and Yuexiu Transport
The main advantage of trading using opposite Saia and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saia 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 Saia Inc 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. Verra Mobility Corp | Yuexiu Transport vs. HUMANA INC | Yuexiu Transport vs. Aquagold International | Yuexiu Transport vs. Barloworld Ltd ADR |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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