Correlation Between Yunnan Xiyi and LiveWire

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Can any of the company-specific risk be diversified away by investing in both Yunnan Xiyi and LiveWire 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 Yunnan Xiyi and LiveWire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yunnan Xiyi Industrial and LiveWire Group, you can compare the effects of market volatilities on Yunnan Xiyi and LiveWire 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 Yunnan Xiyi with a short position of LiveWire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunnan Xiyi and LiveWire.

Diversification Opportunities for Yunnan Xiyi and LiveWire

-0.84
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Yunnan and LiveWire is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Yunnan Xiyi Industrial and LiveWire Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LiveWire Group and Yunnan Xiyi 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 Yunnan Xiyi Industrial are associated (or correlated) with LiveWire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LiveWire Group has no effect on the direction of Yunnan Xiyi i.e., Yunnan Xiyi and LiveWire go up and down completely randomly.

Pair Corralation between Yunnan Xiyi and LiveWire

Assuming the 90 days trading horizon Yunnan Xiyi Industrial is expected to under-perform the LiveWire. But the stock apears to be less risky and, when comparing its historical volatility, Yunnan Xiyi Industrial is 1.6 times less risky than LiveWire. The stock trades about -0.13 of its potential returns per unit of risk. The LiveWire Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  333.00  in LiveWire Group on August 4, 2025 and sell it today you would earn a total of  215.00  from holding LiveWire Group or generate 64.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy92.31%
ValuesDaily Returns

Yunnan Xiyi Industrial  vs.  LiveWire Group

 Performance 
       Timeline  
Yunnan Xiyi Industrial 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Yunnan Xiyi Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
LiveWire Group 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in LiveWire Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, LiveWire reported solid returns over the last few months and may actually be approaching a breakup point.

Yunnan Xiyi and LiveWire Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Yunnan Xiyi and LiveWire

The main advantage of trading using opposite Yunnan Xiyi and LiveWire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunnan Xiyi position performs unexpectedly, LiveWire 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 LiveWire will offset losses from the drop in LiveWire's long position.
The idea behind Yunnan Xiyi Industrial and LiveWire Group 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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