Correlation Between Carnival Industrial and Yi Jinn

Can any of the company-specific risk be diversified away by investing in both Carnival Industrial and Yi Jinn 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 Carnival Industrial and Yi Jinn into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Carnival Industrial Corp and Yi Jinn Industrial, you can compare the effects of market volatilities on Carnival Industrial and Yi Jinn 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 Carnival Industrial with a short position of Yi Jinn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnival Industrial and Yi Jinn.

Diversification Opportunities for Carnival Industrial and Yi Jinn

-0.15

Correlation Coefficient

Carnival Industrial  Yi Jinn

Good diversification

The 3 months correlation between Carnival and 1457 is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Carnival Industrial Corp and Yi Jinn Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yi Jinn Industrial and Carnival Industrial 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 Carnival Industrial Corp are associated (or correlated) with Yi Jinn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yi Jinn Industrial has no effect on the direction of Carnival Industrial i.e., Carnival Industrial and Yi Jinn go up and down completely randomly.

Pair Corralation between Carnival Industrial and Yi Jinn

Assuming the 90 days trading horizon Carnival Industrial Corp is expected to under-perform the Yi Jinn. In addition to that, Carnival Industrial is 1.05 times more volatile than Yi Jinn Industrial. It trades about -0.19 of its total potential returns per unit of risk. Yi Jinn Industrial is currently generating about 0.05 per unit of volatility. If you would invest  1,940  in Yi Jinn Industrial on October 25, 2024 and sell it today you would earn a total of  50.00  from holding Yi Jinn Industrial or generate 2.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Carnival Industrial Corp  vs.  Yi Jinn Industrial

Carnival Industrial Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carnival Industrial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Yi Jinn Industrial

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Yi Jinn Industrial are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Yi Jinn is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Carnival Industrial and Yi Jinn

The main advantage of trading using opposite Carnival Industrial and Yi Jinn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnival Industrial position performs unexpectedly, Yi Jinn 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 Yi Jinn will offset losses from the drop in Yi Jinn's long position.

The idea behind Carnival Industrial Corp and Yi Jinn Industrial 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.

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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.