Correlation Between YX Precious and Oriental Food
Can any of the company-specific risk be diversified away by investing in both YX Precious and Oriental Food 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 YX Precious and Oriental Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YX Precious Metals and Oriental Food Industries, you can compare the effects of market volatilities on YX Precious and Oriental Food 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 YX Precious with a short position of Oriental Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of YX Precious and Oriental Food.
Diversification Opportunities for YX Precious and Oriental Food
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 0250 and Oriental is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding YX Precious Metals and Oriental Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Food Industries and YX Precious 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 YX Precious Metals are associated (or correlated) with Oriental Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Food Industries has no effect on the direction of YX Precious i.e., YX Precious and Oriental Food go up and down completely randomly.
Pair Corralation between YX Precious and Oriental Food
Assuming the 90 days trading horizon YX Precious Metals is expected to generate 1.08 times more return on investment than Oriental Food. However, YX Precious is 1.08 times more volatile than Oriental Food Industries. It trades about 0.0 of its potential returns per unit of risk. Oriental Food Industries is currently generating about -0.01 per unit of risk. If you would invest 26.00 in YX Precious Metals on November 3, 2024 and sell it today you would lose (2.00) from holding YX Precious Metals or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.59% |
| Values | Daily Returns |
YX Precious Metals vs. Oriental Food Industries
Performance |
| Timeline |
| YX Precious Metals |
| Oriental Food Industries |
YX Precious and Oriental Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YX Precious and Oriental Food
The main advantage of trading using opposite YX Precious and Oriental Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YX Precious position performs unexpectedly, Oriental Food 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 Oriental Food will offset losses from the drop in Oriental Food's long position.| YX Precious vs. Dufu Tech Corp | YX Precious vs. ECM Libra Financial | YX Precious vs. ONETECH SOLUTIONS HOLDINGS | YX Precious vs. Sunway Construction Group |
| Oriental Food vs. Binasat Communications Bhd | Oriental Food vs. Carlsberg Brewery Malaysia | Oriental Food vs. Sports Toto Berhad | Oriental Food vs. Sunway Construction 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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