Correlation Between Beijing Sanyuan and Youyou Foods
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By analyzing existing cross correlation between Beijing Sanyuan Foods and Youyou Foods Co, you can compare the effects of market volatilities on Beijing Sanyuan 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 Beijing Sanyuan with a short position of Youyou Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Sanyuan and Youyou Foods.
Diversification Opportunities for Beijing Sanyuan and Youyou Foods
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Youyou is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Sanyuan Foods and Youyou Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youyou Foods and Beijing Sanyuan 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 Beijing Sanyuan Foods 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 Beijing Sanyuan i.e., Beijing Sanyuan and Youyou Foods go up and down completely randomly.
Pair Corralation between Beijing Sanyuan and Youyou Foods
Assuming the 90 days trading horizon Beijing Sanyuan Foods is expected to under-perform the Youyou Foods. But the stock apears to be less risky and, when comparing its historical volatility, Beijing Sanyuan Foods is 3.19 times less risky than Youyou Foods. The stock trades about -0.01 of its potential returns per unit of risk. The Youyou Foods Co is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 656.00 in Youyou Foods Co on August 25, 2024 and sell it today you would earn a total of 311.00 from holding Youyou Foods Co or generate 47.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Sanyuan Foods vs. Youyou Foods Co
Performance |
| Timeline |
| Beijing Sanyuan Foods |
| Youyou Foods |
Beijing Sanyuan and Youyou Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Sanyuan and Youyou Foods
The main advantage of trading using opposite Beijing Sanyuan and Youyou Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Sanyuan 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.| Beijing Sanyuan vs. China Petroleum Chemical | Beijing Sanyuan vs. PetroChina Co Ltd | Beijing Sanyuan vs. China State Construction | Beijing Sanyuan vs. China Railway Group |
| Youyou Foods vs. Hubeiyichang Transportation Group | Youyou Foods vs. Jiujiang Shanshui Technology | Youyou Foods vs. Fujian Longzhou Transportation | Youyou Foods vs. Dazhong Transportation 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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