Correlation Between New Hope and Youyou Foods
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By analyzing existing cross correlation between New Hope Dairy and Youyou Foods Co, you can compare the effects of market volatilities on New Hope and Youyou Foods 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 New Hope with a short position of Youyou Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Hope and Youyou Foods.
Diversification Opportunities for New Hope and Youyou Foods
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between New and Youyou is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding New Hope Dairy and Youyou Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youyou Foods and New Hope 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 New Hope Dairy are associated (or correlated) with Youyou Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youyou Foods has no effect on the direction of New Hope i.e., New Hope and Youyou Foods go up and down completely randomly.
Pair Corralation between New Hope and Youyou Foods
Assuming the 90 days trading horizon New Hope is expected to generate 45.17 times less return on investment than Youyou Foods. But when comparing it to its historical volatility, New Hope Dairy is 1.97 times less risky than Youyou Foods. It trades about 0.01 of its potential returns per unit of risk. Youyou Foods Co is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 735.00 in Youyou Foods Co on August 27, 2024 and sell it today you would earn a total of 232.00 from holding Youyou Foods Co or generate 31.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Hope Dairy vs. Youyou Foods Co
Performance |
| Timeline |
| New Hope Dairy |
| Youyou Foods |
New Hope and Youyou Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Hope and Youyou Foods
The main advantage of trading using opposite New Hope and Youyou Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Hope position performs unexpectedly, Youyou Foods 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 Youyou Foods will offset losses from the drop in Youyou Foods' long position.| New Hope vs. China Petroleum Chemical | New Hope vs. PetroChina Co Ltd | New Hope vs. China State Construction | New Hope vs. China Railway Group |
| Youyou Foods vs. China Petroleum Chemical | Youyou Foods vs. PetroChina Co Ltd | Youyou Foods vs. China State Construction | Youyou Foods vs. China Railway Group |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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