Correlation Between UNITED UTILITIES and Yihai International
Can any of the company-specific risk be diversified away by investing in both UNITED UTILITIES and Yihai International 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 UNITED UTILITIES and Yihai International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNITED UTILITIES GR and Yihai International Holding, you can compare the effects of market volatilities on UNITED UTILITIES and Yihai International 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 UNITED UTILITIES with a short position of Yihai International. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED UTILITIES and Yihai International.
Diversification Opportunities for UNITED UTILITIES and Yihai International
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between UNITED and Yihai is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding UNITED UTILITIES GR and Yihai International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yihai International and UNITED UTILITIES 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 UNITED UTILITIES GR are associated (or correlated) with Yihai International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yihai International has no effect on the direction of UNITED UTILITIES i.e., UNITED UTILITIES and Yihai International go up and down completely randomly.
Pair Corralation between UNITED UTILITIES and Yihai International
Assuming the 90 days trading horizon UNITED UTILITIES is expected to generate 10.46 times less return on investment than Yihai International. But when comparing it to its historical volatility, UNITED UTILITIES GR is 4.03 times less risky than Yihai International. It trades about 0.03 of its potential returns per unit of risk. Yihai International Holding is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 64.00 in Yihai International Holding on September 14, 2024 and sell it today you would earn a total of 124.00 from holding Yihai International Holding or generate 193.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNITED UTILITIES GR vs. Yihai International Holding
Performance |
| Timeline |
| UNITED UTILITIES |
| Yihai International |
UNITED UTILITIES and Yihai International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNITED UTILITIES and Yihai International
The main advantage of trading using opposite UNITED UTILITIES and Yihai International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITED UTILITIES position performs unexpectedly, Yihai International 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 Yihai International will offset losses from the drop in Yihai International's long position.| UNITED UTILITIES vs. National Retail Properties | UNITED UTILITIES vs. QURATE RETAIL INC | UNITED UTILITIES vs. Sumitomo Rubber Industries | UNITED UTILITIES vs. GOODYEAR T RUBBER |
| Yihai International vs. Fair Isaac Corp | Yihai International vs. UNITED UTILITIES GR | Yihai International vs. SOGECLAIR SA INH | Yihai International vs. HF SINCLAIR P |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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