Correlation Between Yuexiu Transport and Verra Mobility

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

Diversification Opportunities for Yuexiu Transport and Verra Mobility

0.7

Correlation Coefficient

Yuexiu Transport  Verra Mobility

Poor diversification

The 3 months correlation between Yuexiu and Verra is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and Verra Mobility Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verra Mobility Corp 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 Verra Mobility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verra Mobility Corp has no effect on the direction of Yuexiu Transport i.e., Yuexiu Transport and Verra Mobility go up and down completely randomly.

Pair Corralation between Yuexiu Transport and Verra Mobility

Assuming the 90 days horizon Yuexiu Transport is expected to generate 4.01 times less return on investment than Verra Mobility. But when comparing it to its historical volatility, Yuexiu Transport Infrastructure is 4.0 times less risky than Verra Mobility. It trades about 0.13 of its potential returns per unit of risk. Verra Mobility Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  2,221  in Verra Mobility Corp on May 7, 2025 and sell it today you would earn a total of  306.00  from holding Verra Mobility Corp or generate 13.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.83%
Values	Daily Returns

Yuexiu Transport Infrastructur  vs.  Verra Mobility Corp

Yuexiu Transport Inf

Risk-Adjusted Performance

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 stable basic indicators, Yuexiu Transport is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Verra Mobility Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Verra Mobility Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Verra Mobility displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yuexiu Transport and Verra Mobility

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

The idea behind Yuexiu Transport Infrastructure and Verra Mobility Corp 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.