Correlation Between Yuexiu Transport and SYLVANIA PLAT

Can any of the company-specific risk be diversified away by investing in both Yuexiu Transport and SYLVANIA PLAT 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 Yuexiu Transport and SYLVANIA PLAT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yuexiu Transport Infrastructure and SYLVANIA PLAT DL, you can compare the effects of market volatilities on Yuexiu Transport and SYLVANIA PLAT 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 Yuexiu Transport with a short position of SYLVANIA PLAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuexiu Transport and SYLVANIA PLAT.

Diversification Opportunities for Yuexiu Transport and SYLVANIA PLAT

-0.54

Correlation Coefficient

Yuexiu Transport  SYLVANIA PLAT

Excellent diversification

The 3 months correlation between Yuexiu and SYLVANIA is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and SYLVANIA PLAT DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYLVANIA PLAT DL and Yuexiu Transport 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 Yuexiu Transport Infrastructure are associated (or correlated) with SYLVANIA PLAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYLVANIA PLAT DL has no effect on the direction of Yuexiu Transport i.e., Yuexiu Transport and SYLVANIA PLAT go up and down completely randomly.

Pair Corralation between Yuexiu Transport and SYLVANIA PLAT

Assuming the 90 days horizon Yuexiu Transport Infrastructure is expected to under-perform the SYLVANIA PLAT. But the stock apears to be less risky and, when comparing its historical volatility, Yuexiu Transport Infrastructure is 1.6 times less risky than SYLVANIA PLAT. The stock trades about -0.01 of its potential returns per unit of risk. The SYLVANIA PLAT DL is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  46.00  in SYLVANIA PLAT DL on December 20, 2024 and sell it today you would earn a total of  17.00  from holding SYLVANIA PLAT DL or generate 36.96% return on investment over 90 days.

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

Yuexiu Transport Infrastructur  vs.  SYLVANIA PLAT DL

Yuexiu Transport Inf

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yuexiu Transport Infrastructure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Yuexiu Transport is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

SYLVANIA PLAT DL

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SYLVANIA PLAT DL are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SYLVANIA PLAT reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yuexiu Transport and SYLVANIA PLAT

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

The idea behind Yuexiu Transport Infrastructure and SYLVANIA PLAT DL 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.