Correlation Between Yuexiu Transport and US Bancorp
Can any of the company-specific risk be diversified away by investing in both Yuexiu Transport and US Bancorp 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 US Bancorp 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 US Bancorp, you can compare the effects of market volatilities on Yuexiu Transport and US Bancorp 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 US Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuexiu Transport and US Bancorp.
Diversification Opportunities for Yuexiu Transport and US Bancorp
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yuexiu and UB5 is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and US Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Bancorp 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 US Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Bancorp has no effect on the direction of Yuexiu Transport i.e., Yuexiu Transport and US Bancorp go up and down completely randomly.
Pair Corralation between Yuexiu Transport and US Bancorp
Assuming the 90 days horizon Yuexiu Transport Infrastructure is expected to generate 1.42 times more return on investment than US Bancorp. However, Yuexiu Transport is 1.42 times more volatile than US Bancorp. It trades about 0.07 of its potential returns per unit of risk. US Bancorp is currently generating about -0.09 per unit of risk. If you would invest 44.00 in Yuexiu Transport Infrastructure on November 22, 2024 and sell it today you would earn a total of 1.00 from holding Yuexiu Transport Infrastructure or generate 2.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.65% |
Values | Daily Returns |
Yuexiu Transport Infrastructur vs. US Bancorp
Performance |
Timeline |
Yuexiu Transport Inf |
US Bancorp |
Yuexiu Transport and US Bancorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Yuexiu Transport and US Bancorp
The main advantage of trading using opposite Yuexiu Transport and US Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuexiu Transport position performs unexpectedly, US Bancorp 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 US Bancorp will offset losses from the drop in US Bancorp's long position.Yuexiu Transport vs. SINGAPORE AIRLINES | ||
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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