Correlation Between Cayman Engley and Yulon Nissan

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

By analyzing existing cross correlation between Cayman Engley Industrial and Yulon Nissan Motor, you can compare the effects of market volatilities on Cayman Engley and Yulon Nissan 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 Cayman Engley with a short position of Yulon Nissan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cayman Engley and Yulon Nissan.

Diversification Opportunities for Cayman Engley and Yulon Nissan

0.94

Correlation Coefficient

Cayman Engley  Yulon Nissan

Almost no diversification

The 3 months correlation between Cayman and Yulon is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Cayman Engley Industrial and Yulon Nissan Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yulon Nissan Motor and Cayman Engley 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 Cayman Engley Industrial are associated (or correlated) with Yulon Nissan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yulon Nissan Motor has no effect on the direction of Cayman Engley i.e., Cayman Engley and Yulon Nissan go up and down completely randomly.

Pair Corralation between Cayman Engley and Yulon Nissan

Assuming the 90 days trading horizon Cayman Engley Industrial is expected to generate 0.93 times more return on investment than Yulon Nissan. However, Cayman Engley Industrial is 1.08 times less risky than Yulon Nissan. It trades about -0.11 of its potential returns per unit of risk. Yulon Nissan Motor is currently generating about -0.19 per unit of risk. If you would invest  5,950  in Cayman Engley Industrial on September 24, 2024 and sell it today you would lose (2,405) from holding Cayman Engley Industrial or give up 40.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Cayman Engley Industrial  vs.  Yulon Nissan Motor

Cayman Engley Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cayman Engley Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Yulon Nissan Motor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yulon Nissan Motor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Cayman Engley and Yulon Nissan

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

The idea behind Cayman Engley Industrial and Yulon Nissan Motor 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.