Correlation Between Yuexiu Transport and Bank

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

Diversification Opportunities for Yuexiu Transport and Bank

0.0

Correlation Coefficient

Yuexiu Transport  Bank

Pay attention - limited upside

The 3 months correlation between Yuexiu and Bank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank 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 Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank has no effect on the direction of Yuexiu Transport i.e., Yuexiu Transport and Bank go up and down completely randomly.

Pair Corralation between Yuexiu Transport and Bank

If you would invest (100.00) in Bank on December 25, 2024 and sell it today you would earn a total of  100.00  from holding Bank or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Yuexiu Transport Infrastructur  vs.  Bank

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.

Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Bank 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 Bank

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

The idea behind Yuexiu Transport Infrastructure and Bank 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.

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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.