Correlation Between China World and Yifeng Pharmacy

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both China World and Yifeng Pharmacy 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 China World and Yifeng Pharmacy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China World Trade and Yifeng Pharmacy, you can compare the effects of market volatilities on China World 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 China World with a short position of Yifeng Pharmacy. Check out your portfolio center. Please also check ongoing floating volatility patterns of China World and Yifeng Pharmacy.

Diversification Opportunities for China World and Yifeng Pharmacy

0.02
  Correlation Coefficient

Significant diversification

The 3 months correlation between China and Yifeng is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding China World Trade and Yifeng Pharmacy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yifeng Pharmacy and China World 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 China World Trade 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 China World i.e., China World and Yifeng Pharmacy go up and down completely randomly.

Pair Corralation between China World and Yifeng Pharmacy

Assuming the 90 days trading horizon China World Trade is expected to generate 0.65 times more return on investment than Yifeng Pharmacy. However, China World Trade is 1.53 times less risky than Yifeng Pharmacy. It trades about 0.06 of its potential returns per unit of risk. Yifeng Pharmacy is currently generating about -0.03 per unit of risk. If you would invest  1,495  in China World Trade on September 13, 2024 and sell it today you would earn a total of  842.00  from holding China World Trade or generate 56.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

China World Trade  vs.  Yifeng Pharmacy

 Performance 
       Timeline  
China World Trade 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in China World Trade are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, China World is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Yifeng Pharmacy 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Yifeng Pharmacy are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Yifeng Pharmacy sustained solid returns over the last few months and may actually be approaching a breakup point.

China World and Yifeng Pharmacy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with China World and Yifeng Pharmacy

The main advantage of trading using opposite China World and Yifeng Pharmacy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China World 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.
China World vs. China Life Insurance
China World vs. Cinda Securities Co
China World vs. Piotech Inc A
China World vs. Dongxing Sec Co
The idea behind China World Trade and Yifeng Pharmacy 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.
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

Other Complementary Tools

Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
CEOs Directory
Screen CEOs from public companies around the world


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY