Correlation Between Yuexiu Transport and Zoomcar Holdings

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

Diversification Opportunities for Yuexiu Transport and Zoomcar Holdings

YuexiuZoomcarDiversified AwayYuexiuZoomcarDiversified Away100%
0.23
  Correlation Coefficient

Modest diversification

The 3 months correlation between Yuexiu and Zoomcar is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and Zoomcar Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoomcar Holdings 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 Zoomcar Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoomcar Holdings has no effect on the direction of Yuexiu Transport i.e., Yuexiu Transport and Zoomcar Holdings go up and down completely randomly.

Pair Corralation between Yuexiu Transport and Zoomcar Holdings

Assuming the 90 days horizon Yuexiu Transport is expected to generate 6.18 times less return on investment than Zoomcar Holdings. But when comparing it to its historical volatility, Yuexiu Transport Infrastructure is 8.28 times less risky than Zoomcar Holdings. It trades about 0.13 of its potential returns per unit of risk. Zoomcar Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1.63  in Zoomcar Holdings on September 15, 2024 and sell it today you would lose (0.38) from holding Zoomcar Holdings or give up 23.31% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy95.31%
ValuesDaily Returns

Yuexiu Transport Infrastructur  vs.  Zoomcar Holdings

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -50050100150
JavaScript chart by amCharts 3.21.15GZITF ZCARW
       Timeline  
Yuexiu Transport Inf 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Yuexiu Transport Infrastructure are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Yuexiu Transport reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec0.460.480.50.520.540.560.58
Zoomcar Holdings 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Zoomcar Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Zoomcar Holdings showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec0.010.0150.020.0250.030.035

Yuexiu Transport and Zoomcar Holdings Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-10.13-7.59-5.04-2.50.04242.675.348.0510.7713.48 0.0050.0100.0150.0200.0250.0300.035
JavaScript chart by amCharts 3.21.15GZITF ZCARW
       Returns  

Pair Trading with Yuexiu Transport and Zoomcar Holdings

The main advantage of trading using opposite Yuexiu Transport and Zoomcar Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuexiu Transport position performs unexpectedly, Zoomcar Holdings 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 Zoomcar Holdings will offset losses from the drop in Zoomcar Holdings' long position.
The idea behind Yuexiu Transport Infrastructure and Zoomcar Holdings 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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