Correlation Between Century Wind and Yulon Finance

Can any of the company-specific risk be diversified away by investing in both Century Wind and Yulon Finance 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 Century Wind and Yulon Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Century Wind Power and Yulon Finance Corp, you can compare the effects of market volatilities on Century Wind and Yulon Finance 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 Century Wind with a short position of Yulon Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Wind and Yulon Finance.

Diversification Opportunities for Century Wind and Yulon Finance

0.0

Correlation Coefficient

Century Wind  Yulon Finance

Pay attention - limited upside

The 3 months correlation between Century and Yulon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Century Wind Power and Yulon Finance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yulon Finance Corp and Century Wind 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 Century Wind Power are associated (or correlated) with Yulon Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yulon Finance Corp has no effect on the direction of Century Wind i.e., Century Wind and Yulon Finance go up and down completely randomly.

Pair Corralation between Century Wind and Yulon Finance

If you would invest (100.00) in Yulon Finance Corp on October 1, 2024 and sell it today you would earn a total of  100.00  from holding Yulon Finance Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Century Wind Power  vs.  Yulon Finance Corp

Century Wind Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Century Wind Power has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Century Wind is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Yulon Finance Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yulon Finance Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Yulon Finance is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Century Wind and Yulon Finance

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

The idea behind Century Wind Power and Yulon Finance Corp 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.