Correlation Between Yuexiu Transport and ChemoMetec A/S

Can any of the company-specific risk be diversified away by investing in both Yuexiu Transport and ChemoMetec A/S 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 ChemoMetec A/S 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 ChemoMetec AS, you can compare the effects of market volatilities on Yuexiu Transport and ChemoMetec A/S 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 ChemoMetec A/S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuexiu Transport and ChemoMetec A/S.

Diversification Opportunities for Yuexiu Transport and ChemoMetec A/S

0.03

Correlation Coefficient

Yuexiu Transport  ChemoMetec A/S

Significant diversification

The 3 months correlation between Yuexiu and ChemoMetec is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and ChemoMetec AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChemoMetec A/S 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 ChemoMetec A/S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChemoMetec A/S has no effect on the direction of Yuexiu Transport i.e., Yuexiu Transport and ChemoMetec A/S go up and down completely randomly.

Pair Corralation between Yuexiu Transport and ChemoMetec A/S

Assuming the 90 days horizon Yuexiu Transport Infrastructure is expected to under-perform the ChemoMetec A/S. But the stock apears to be less risky and, when comparing its historical volatility, Yuexiu Transport Infrastructure is 1.31 times less risky than ChemoMetec A/S. The stock trades about -0.01 of its potential returns per unit of risk. The ChemoMetec AS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  6,530  in ChemoMetec AS on December 22, 2024 and sell it today you would earn a total of  700.00  from holding ChemoMetec AS or generate 10.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Yuexiu Transport Infrastructur  vs.  ChemoMetec AS

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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

ChemoMetec A/S

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ChemoMetec AS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ChemoMetec A/S reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yuexiu Transport and ChemoMetec A/S

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

The idea behind Yuexiu Transport Infrastructure and ChemoMetec AS 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.