Correlation Between Yuexiu Transport and Gecina SA

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

Diversification Opportunities for Yuexiu Transport and Gecina SA

0.08

Correlation Coefficient

Yuexiu Transport  Gecina SA

Significant diversification

The 3 months correlation between Yuexiu and Gecina is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and Gecina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gecina SA 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 Gecina SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gecina SA has no effect on the direction of Yuexiu Transport i.e., Yuexiu Transport and Gecina SA go up and down completely randomly.

Pair Corralation between Yuexiu Transport and Gecina SA

Assuming the 90 days horizon Yuexiu Transport Infrastructure is expected to under-perform the Gecina SA. In addition to that, Yuexiu Transport is 1.68 times more volatile than Gecina SA. It trades about -0.01 of its total potential returns per unit of risk. Gecina SA is currently generating about 0.04 per unit of volatility. If you would invest  8,517  in Gecina SA on December 20, 2024 and sell it today you would earn a total of  198.00  from holding Gecina SA or generate 2.32% return on investment over 90 days.

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

Yuexiu Transport Infrastructur  vs.  Gecina SA

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.

Gecina SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gecina SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Gecina SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Yuexiu Transport and Gecina SA

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

The idea behind Yuexiu Transport Infrastructure and Gecina SA 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.