Correlation Between Guangdong Wens and Yonyou Auto
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By analyzing existing cross correlation between Guangdong Wens Foodstuff and Yonyou Auto Information, you can compare the effects of market volatilities on Guangdong Wens and Yonyou Auto 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 Guangdong Wens with a short position of Yonyou Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Wens and Yonyou Auto.
Diversification Opportunities for Guangdong Wens and Yonyou Auto
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Yonyou is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Wens Foodstuff and Yonyou Auto Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yonyou Auto Information and Guangdong Wens 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 Guangdong Wens Foodstuff are associated (or correlated) with Yonyou Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yonyou Auto Information has no effect on the direction of Guangdong Wens i.e., Guangdong Wens and Yonyou Auto go up and down completely randomly.
Pair Corralation between Guangdong Wens and Yonyou Auto
Assuming the 90 days trading horizon Guangdong Wens Foodstuff is expected to under-perform the Yonyou Auto. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Wens Foodstuff is 1.38 times less risky than Yonyou Auto. The stock trades about -0.01 of its potential returns per unit of risk. The Yonyou Auto Information is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,257 in Yonyou Auto Information on September 12, 2024 and sell it today you would lose (257.00) from holding Yonyou Auto Information or give up 11.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Wens Foodstuff vs. Yonyou Auto Information
Performance |
| Timeline |
| Guangdong Wens Foodstuff |
| Yonyou Auto Information |
Guangdong Wens and Yonyou Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Wens and Yonyou Auto
The main advantage of trading using opposite Guangdong Wens and Yonyou Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Wens position performs unexpectedly, Yonyou Auto 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 Yonyou Auto will offset losses from the drop in Yonyou Auto's long position.| Guangdong Wens vs. China Petroleum Chemical | Guangdong Wens vs. PetroChina Co Ltd | Guangdong Wens vs. China State Construction | Guangdong Wens vs. China Railway Group |
| Yonyou Auto vs. Gansu Jiu Steel | Yonyou Auto vs. Shandong Mining Machinery | Yonyou Auto vs. Aba Chemicals Corp | Yonyou Auto vs. BlueFocus Communication 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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