Correlation Between Yulon Finance and Delpha Construction

Can any of the company-specific risk be diversified away by investing in both Yulon Finance and Delpha Construction 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 Delpha Construction 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 Delpha Construction Co, you can compare the effects of market volatilities on Yulon Finance and Delpha Construction 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 Delpha Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Finance and Delpha Construction.

Diversification Opportunities for Yulon Finance and Delpha Construction

0.39

Correlation Coefficient

Yulon Finance  Delpha Construction

Weak diversification

The 3 months correlation between Yulon and Delpha is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Finance Corp and Delpha Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delpha Construction 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 Delpha Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delpha Construction has no effect on the direction of Yulon Finance i.e., Yulon Finance and Delpha Construction go up and down completely randomly.

Pair Corralation between Yulon Finance and Delpha Construction

Assuming the 90 days trading horizon Yulon Finance Corp is expected to generate 0.15 times more return on investment than Delpha Construction. However, Yulon Finance Corp is 6.67 times less risky than Delpha Construction. It trades about -0.1 of its potential returns per unit of risk. Delpha Construction Co is currently generating about -0.18 per unit of risk. If you would invest  5,150  in Yulon Finance Corp on October 4, 2024 and sell it today you would lose (20.00) from holding Yulon Finance Corp or give up 0.39% of portfolio value over 90 days.

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

Yulon Finance Corp  vs.  Delpha Construction Co

Yulon Finance Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Yulon Finance Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Yulon Finance is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Delpha Construction

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Delpha Construction Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Delpha Construction 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 Yulon Finance and Delpha Construction

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

The idea behind Yulon Finance Corp and Delpha Construction Co 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.