Correlation Between High Performance and Yuexiu Transport

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

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

Diversification Opportunities for High Performance and Yuexiu Transport

0.0

Correlation Coefficient

High Performance  Yuexiu Transport

Pay attention - limited upside

The 3 months correlation between High and Yuexiu is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding High Performance Beverages 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 High Performance 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 High Performance Beverages 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 High Performance i.e., High Performance and Yuexiu Transport go up and down completely randomly.

Pair Corralation between High Performance and Yuexiu Transport

Given the investment horizon of 90 days High Performance Beverages is expected to generate 121.24 times more return on investment than Yuexiu Transport. However, High Performance is 121.24 times more volatile than Yuexiu Transport Infrastructure. It trades about 0.34 of its potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about 0.1 per unit of risk. If you would invest  0.01  in High Performance Beverages on October 11, 2024 and sell it today you would lose (0.01) from holding High Performance Beverages or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

High Performance Beverages  vs.  Yuexiu Transport Infrastructur

High Performance Bev

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days High Performance Beverages has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, High Performance is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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 High Performance and Yuexiu Transport

The main advantage of trading using opposite High Performance and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Performance 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 High Performance Beverages 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.