Correlation Between Yong Concrete and Aurora Design
Can any of the company-specific risk be diversified away by investing in both Yong Concrete and Aurora Design 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 Yong Concrete and Aurora Design into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yong Concrete PCL and Aurora Design PCL, you can compare the effects of market volatilities on Yong Concrete and Aurora Design 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 Yong Concrete with a short position of Aurora Design. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yong Concrete and Aurora Design.
Diversification Opportunities for Yong Concrete and Aurora Design
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yong and Aurora is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Yong Concrete PCL and Aurora Design PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Design PCL and Yong Concrete 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 Yong Concrete PCL are associated (or correlated) with Aurora Design. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Design PCL has no effect on the direction of Yong Concrete i.e., Yong Concrete and Aurora Design go up and down completely randomly.
Pair Corralation between Yong Concrete and Aurora Design
Assuming the 90 days trading horizon Yong Concrete PCL is expected to generate 0.99 times more return on investment than Aurora Design. However, Yong Concrete PCL is 1.01 times less risky than Aurora Design. It trades about 0.04 of its potential returns per unit of risk. Aurora Design PCL is currently generating about -0.03 per unit of risk. If you would invest 101.00 in Yong Concrete PCL on December 1, 2024 and sell it today you would earn a total of 1.00 from holding Yong Concrete PCL or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Yong Concrete PCL vs. Aurora Design PCL
Performance |
| Timeline |
| Yong Concrete PCL |
| Aurora Design PCL |
Yong Concrete and Aurora Design Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yong Concrete and Aurora Design
The main advantage of trading using opposite Yong Concrete and Aurora Design positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yong Concrete position performs unexpectedly, Aurora Design 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 Aurora Design will offset losses from the drop in Aurora Design's long position.| Yong Concrete vs. Exotic Food Public | Yong Concrete vs. Knight Club Capital | Yong Concrete vs. North East Rubbers | Yong Concrete vs. Yggdrazil Group Public |
| Aurora Design vs. Srinanaporn Marketing Public | Aurora Design vs. AP Public | Aurora Design vs. Mega Lifesciences Public | Aurora Design vs. Siam Global House |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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