Correlation Between Yuexiu Transport and Arthur J

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

Diversification Opportunities for Yuexiu Transport and Arthur J

-0.17

Correlation Coefficient

Yuexiu Transport  Arthur J

Good diversification

The 3 months correlation between Yuexiu and Arthur is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and Arthur J Gallagher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arthur J Gallagher 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 Arthur J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arthur J Gallagher has no effect on the direction of Yuexiu Transport i.e., Yuexiu Transport and Arthur J go up and down completely randomly.

Pair Corralation between Yuexiu Transport and Arthur J

Assuming the 90 days horizon Yuexiu Transport Infrastructure is expected to under-perform the Arthur J. In addition to that, Yuexiu Transport is 1.28 times more volatile than Arthur J Gallagher. It trades about -0.01 of its total potential returns per unit of risk. Arthur J Gallagher is currently generating about 0.14 per unit of volatility. If you would invest  26,689  in Arthur J Gallagher on December 20, 2024 and sell it today you would earn a total of  3,511  from holding Arthur J Gallagher or generate 13.16% return on investment over 90 days.

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

Yuexiu Transport Infrastructur  vs.  Arthur J Gallagher

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.

Arthur J Gallagher

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Arthur J Gallagher are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Arthur J reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yuexiu Transport and Arthur J

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

The idea behind Yuexiu Transport Infrastructure and Arthur J Gallagher 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.