Correlation Between Yulon Finance and Huaku Development
Can any of the company-specific risk be diversified away by investing in both Yulon Finance and Huaku Development 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 Yulon Finance and Huaku Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yulon Finance Corp and Huaku Development Co, you can compare the effects of market volatilities on Yulon Finance and Huaku Development 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 Yulon Finance with a short position of Huaku Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Finance and Huaku Development.
Diversification Opportunities for Yulon Finance and Huaku Development
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yulon and Huaku is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Finance Corp and Huaku Development Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huaku Development and Yulon Finance 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 Yulon Finance Corp are associated (or correlated) with Huaku Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huaku Development has no effect on the direction of Yulon Finance i.e., Yulon Finance and Huaku Development go up and down completely randomly.
Pair Corralation between Yulon Finance and Huaku Development
Assuming the 90 days trading horizon Yulon Finance Corp is expected to generate 1.28 times more return on investment than Huaku Development. However, Yulon Finance is 1.28 times more volatile than Huaku Development Co. It trades about 0.02 of its potential returns per unit of risk. Huaku Development Co is currently generating about -0.01 per unit of risk. If you would invest 11,900 in Yulon Finance Corp on December 3, 2024 and sell it today you would earn a total of 100.00 from holding Yulon Finance Corp or generate 0.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.25% |
Values | Daily Returns |
Yulon Finance Corp vs. Huaku Development Co
Performance |
Timeline |
Yulon Finance Corp |
Huaku Development |
Yulon Finance and Huaku Development Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Yulon Finance and Huaku Development
The main advantage of trading using opposite Yulon Finance and Huaku Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Finance position performs unexpectedly, Huaku Development 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 Huaku Development will offset losses from the drop in Huaku Development's long position.Yulon Finance vs. Chailease Holding Co | Yulon Finance vs. Taiwan Secom Co | Yulon Finance vs. TTET Union Corp | Yulon Finance vs. China Steel Chemical |
Huaku Development vs. Chong Hong Construction | Huaku Development vs. Highwealth Construction Corp | Huaku Development vs. Fubon Financial Holding | Huaku Development vs. CTBC Financial Holding |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Stocks Directory Find actively traded stocks across global markets | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |