Correlation Between Qingdao Foods and Northern United

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

Diversification Opportunities for Qingdao Foods and Northern United

QingdaoNorthernDiversified AwayQingdaoNorthernDiversified Away100%
0.72
  Correlation Coefficient

Poor diversification

The 3 months correlation between Qingdao and Northern is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Qingdao Foods Co and Northern United Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern United Publ and Qingdao Foods 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 Qingdao Foods Co are associated (or correlated) with Northern United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern United Publ has no effect on the direction of Qingdao Foods i.e., Qingdao Foods and Northern United go up and down completely randomly.

Pair Corralation between Qingdao Foods and Northern United

Assuming the 90 days trading horizon Qingdao Foods Co is expected to under-perform the Northern United. But the stock apears to be less risky and, when comparing its historical volatility, Qingdao Foods Co is 1.28 times less risky than Northern United. The stock trades about -0.14 of its potential returns per unit of risk. The Northern United Publishing is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  649.00  in Northern United Publishing on October 30, 2024 and sell it today you would earn a total of  3.00  from holding Northern United Publishing or generate 0.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Qingdao Foods Co  vs.  Northern United Publishing

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -100102030
JavaScript chart by amCharts 3.21.15001219 601999
       Timeline  
Qingdao Foods 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Qingdao Foods Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Qingdao Foods may actually be approaching a critical reversion point that can send shares even higher in February 2025.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1314151617
Northern United Publ 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Northern United Publishing are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Northern United is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan66.577.588.5

Qingdao Foods and Northern United Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-9.12-6.83-4.54-2.250.02.274.636.989.3311.69 0.0200.0250.0300.0350.0400.045
JavaScript chart by amCharts 3.21.15001219 601999
       Returns  

Pair Trading with Qingdao Foods and Northern United

The main advantage of trading using opposite Qingdao Foods and Northern United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qingdao Foods position performs unexpectedly, Northern United 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 Northern United will offset losses from the drop in Northern United's long position.
The idea behind Qingdao Foods Co and Northern United Publishing 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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