Correlation Between Rambler Metals and Yuexiu Transport

Can any of the company-specific risk be diversified away by investing in both Rambler Metals and Yuexiu Transport 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 Rambler Metals and Yuexiu Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Rambler Metals and and Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on Rambler Metals and Yuexiu Transport 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 Rambler Metals with a short position of Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rambler Metals and Yuexiu Transport.

Diversification Opportunities for Rambler Metals and Yuexiu Transport

0.0

Correlation Coefficient

Rambler Metals  Yuexiu Transport

Pay attention - limited upside

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

Pair Corralation between Rambler Metals and Yuexiu Transport

Assuming the 90 days horizon Rambler Metals is expected to generate 3.78 times less return on investment than Yuexiu Transport. In addition to that, Rambler Metals is 1.17 times more volatile than Yuexiu Transport Infrastructure. It trades about 0.02 of its total potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about 0.1 per unit of volatility. If you would invest  18.00  in Yuexiu Transport Infrastructure on October 26, 2024 and sell it today you would earn a total of  40.00  from holding Yuexiu Transport Infrastructure or generate 222.22% return on investment over 90 days.

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

Rambler Metals and  vs.  Yuexiu Transport Infrastructur

Rambler Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rambler Metals and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Rambler Metals is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Yuexiu Transport Inf

Risk-Adjusted Performance

10 of 100

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.

Pair Trading with Rambler Metals and Yuexiu Transport

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

The idea behind Rambler Metals and and Yuexiu Transport Infrastructure 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.