Correlation Between CHINA DEVELOPMENT and Yulon Finance

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

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

Diversification Opportunities for CHINA DEVELOPMENT and Yulon Finance

0.0

Correlation Coefficient

CHINA DEVELOPMENT  Yulon Finance

Pay attention - limited upside

The 3 months correlation between CHINA and Yulon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHINA DEVELOPMENT FINANCIAL 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 CHINA DEVELOPMENT 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 CHINA DEVELOPMENT FINANCIAL 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 CHINA DEVELOPMENT i.e., CHINA DEVELOPMENT and Yulon Finance go up and down completely randomly.

Pair Corralation between CHINA DEVELOPMENT and Yulon Finance

If you would invest  750.00  in CHINA DEVELOPMENT FINANCIAL on October 1, 2024 and sell it today you would earn a total of  38.00  from holding CHINA DEVELOPMENT FINANCIAL or generate 5.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

CHINA DEVELOPMENT FINANCIAL  vs.  Yulon Finance Corp

CHINA DEVELOPMENT

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CHINA DEVELOPMENT FINANCIAL are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, CHINA DEVELOPMENT is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private 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 CHINA DEVELOPMENT and Yulon Finance

The main advantage of trading using opposite CHINA DEVELOPMENT and Yulon Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA DEVELOPMENT 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 CHINA DEVELOPMENT FINANCIAL 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.