Correlation Between Renxin New and Yifeng Pharmacy
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By analyzing existing cross correlation between Renxin New Material and Yifeng Pharmacy, you can compare the effects of market volatilities on Renxin New and Yifeng Pharmacy 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 Renxin New with a short position of Yifeng Pharmacy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renxin New and Yifeng Pharmacy.
Diversification Opportunities for Renxin New and Yifeng Pharmacy
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Renxin and Yifeng is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Renxin New Material and Yifeng Pharmacy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yifeng Pharmacy and Renxin New 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 Renxin New Material are associated (or correlated) with Yifeng Pharmacy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yifeng Pharmacy has no effect on the direction of Renxin New i.e., Renxin New and Yifeng Pharmacy go up and down completely randomly.
Pair Corralation between Renxin New and Yifeng Pharmacy
Assuming the 90 days trading horizon Renxin New Material is expected to under-perform the Yifeng Pharmacy. In addition to that, Renxin New is 1.41 times more volatile than Yifeng Pharmacy. It trades about -0.03 of its total potential returns per unit of risk. Yifeng Pharmacy is currently generating about -0.03 per unit of volatility. If you would invest 4,194 in Yifeng Pharmacy on September 13, 2024 and sell it today you would lose (1,761) from holding Yifeng Pharmacy or give up 41.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 74.37% |
| Values | Daily Returns |
Renxin New Material vs. Yifeng Pharmacy
Performance |
| Timeline |
| Renxin New Material |
| Yifeng Pharmacy |
Renxin New and Yifeng Pharmacy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Renxin New and Yifeng Pharmacy
The main advantage of trading using opposite Renxin New and Yifeng Pharmacy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renxin New position performs unexpectedly, Yifeng Pharmacy 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 Yifeng Pharmacy will offset losses from the drop in Yifeng Pharmacy's long position.| Renxin New vs. Jiujiang Shanshui Technology | Renxin New vs. Beijing Kaiwen Education | Renxin New vs. Time Publishing and | Renxin New vs. Shandong Publishing Media |
| Yifeng Pharmacy vs. China Construction Bank | Yifeng Pharmacy vs. Ping An Insurance | Yifeng Pharmacy vs. LianChuang Electronic Technology | Yifeng Pharmacy vs. YiDong Electronics Technology |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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