Correlation Between Yanlord Land and Holiday Island

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

By analyzing existing cross correlation between Yanlord Land Group and Holiday Island Holdings, you can compare the effects of market volatilities on Yanlord Land and Holiday Island 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 Yanlord Land with a short position of Holiday Island. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yanlord Land and Holiday Island.

Diversification Opportunities for Yanlord Land and Holiday Island

-0.59

Correlation Coefficient

Yanlord Land  Holiday Island

Excellent diversification

The 3 months correlation between Yanlord and Holiday is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Yanlord Land Group and Holiday Island Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holiday Island Holdings and Yanlord Land 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 Yanlord Land Group are associated (or correlated) with Holiday Island. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holiday Island Holdings has no effect on the direction of Yanlord Land i.e., Yanlord Land and Holiday Island go up and down completely randomly.

Pair Corralation between Yanlord Land and Holiday Island

Assuming the 90 days horizon Yanlord Land Group is expected to generate 0.41 times more return on investment than Holiday Island. However, Yanlord Land Group is 2.44 times less risky than Holiday Island. It trades about 0.13 of its potential returns per unit of risk. Holiday Island Holdings is currently generating about 0.03 per unit of risk. If you would invest  657.00  in Yanlord Land Group on September 16, 2024 and sell it today you would earn a total of  405.00  from holding Yanlord Land Group or generate 61.64% return on investment over 90 days.

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

Yanlord Land Group  vs.  Holiday Island Holdings

Yanlord Land Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yanlord Land Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical and fundamental indicators, Yanlord Land showed solid returns over the last few months and may actually be approaching a breakup point.

Holiday Island Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Holiday Island Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, Holiday Island demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yanlord Land and Holiday Island

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

The idea behind Yanlord Land Group and Holiday Island 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.