Correlation Between China Yuchai and Retailing Fund

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both China Yuchai and Retailing Fund 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 Yuchai and Retailing Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Yuchai International and Retailing Fund Class, you can compare the effects of market volatilities on China Yuchai and Retailing Fund 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 Yuchai with a short position of Retailing Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Yuchai and Retailing Fund.

Diversification Opportunities for China Yuchai and Retailing Fund

-0.55
  Correlation Coefficient

Excellent diversification

The 3 months correlation between China and Retailing is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding China Yuchai International and Retailing Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retailing Fund Class and China Yuchai 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 Yuchai International are associated (or correlated) with Retailing Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retailing Fund Class has no effect on the direction of China Yuchai i.e., China Yuchai and Retailing Fund go up and down completely randomly.

Pair Corralation between China Yuchai and Retailing Fund

Considering the 90-day investment horizon China Yuchai is expected to generate 4.26 times less return on investment than Retailing Fund. In addition to that, China Yuchai is 4.65 times more volatile than Retailing Fund Class. It trades about 0.01 of its total potential returns per unit of risk. Retailing Fund Class is currently generating about 0.13 per unit of volatility. If you would invest  4,040  in Retailing Fund Class on October 24, 2024 and sell it today you would earn a total of  270.00  from holding Retailing Fund Class or generate 6.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

China Yuchai International  vs.  Retailing Fund Class

 Performance 
       Timeline  
China Yuchai Interna 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Weak
Over the last 90 days China Yuchai International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, China Yuchai is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
Retailing Fund Class 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Retailing Fund Class are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Retailing Fund may actually be approaching a critical reversion point that can send shares even higher in February 2025.

China Yuchai and Retailing Fund Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with China Yuchai and Retailing Fund

The main advantage of trading using opposite China Yuchai and Retailing Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Yuchai position performs unexpectedly, Retailing Fund 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 Retailing Fund will offset losses from the drop in Retailing Fund's long position.
The idea behind China Yuchai International and Retailing Fund Class 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

Other Complementary Tools

Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Investing Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences