Correlation Between SPORTING and Yuexiu Transport

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

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

Diversification Opportunities for SPORTING and Yuexiu Transport

-0.6

Correlation Coefficient

SPORTING  Yuexiu Transport

Excellent diversification

The 3 months correlation between SPORTING and Yuexiu is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding SPORTING 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 SPORTING 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 SPORTING 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 SPORTING i.e., SPORTING and Yuexiu Transport go up and down completely randomly.

Pair Corralation between SPORTING and Yuexiu Transport

Assuming the 90 days trading horizon SPORTING is expected to generate 1.53 times more return on investment than Yuexiu Transport. However, SPORTING is 1.53 times more volatile than Yuexiu Transport Infrastructure. It trades about 0.16 of its potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about -0.13 per unit of risk. If you would invest  80.00  in SPORTING on October 26, 2024 and sell it today you would earn a total of  8.00  from holding SPORTING or generate 10.0% return on investment over 90 days.

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

SPORTING  vs.  Yuexiu Transport Infrastructur

SPORTING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPORTING has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Yuexiu Transport Inf

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yuexiu Transport Infrastructure are ranked lower than 9 (%) 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 SPORTING and Yuexiu Transport

The main advantage of trading using opposite SPORTING and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORTING 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 SPORTING 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.