Correlation Between Yindu Kitchen and Longxing Chemical
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By analyzing existing cross correlation between Yindu Kitchen Equipment and Longxing Chemical Stock, you can compare the effects of market volatilities on Yindu Kitchen and Longxing Chemical 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 Yindu Kitchen with a short position of Longxing Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yindu Kitchen and Longxing Chemical.
Diversification Opportunities for Yindu Kitchen and Longxing Chemical
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yindu and Longxing is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Yindu Kitchen Equipment and Longxing Chemical Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longxing Chemical Stock and Yindu Kitchen 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 Yindu Kitchen Equipment are associated (or correlated) with Longxing Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longxing Chemical Stock has no effect on the direction of Yindu Kitchen i.e., Yindu Kitchen and Longxing Chemical go up and down completely randomly.
Pair Corralation between Yindu Kitchen and Longxing Chemical
Assuming the 90 days trading horizon Yindu Kitchen Equipment is expected to generate 0.88 times more return on investment than Longxing Chemical. However, Yindu Kitchen Equipment is 1.14 times less risky than Longxing Chemical. It trades about 0.11 of its potential returns per unit of risk. Longxing Chemical Stock is currently generating about 0.02 per unit of risk. If you would invest 2,388 in Yindu Kitchen Equipment on November 8, 2024 and sell it today you would earn a total of 99.00 from holding Yindu Kitchen Equipment or generate 4.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Yindu Kitchen Equipment vs. Longxing Chemical Stock
Performance |
| Timeline |
| Yindu Kitchen Equipment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Longxing Chemical Stock |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Yindu Kitchen and Longxing Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yindu Kitchen and Longxing Chemical
The main advantage of trading using opposite Yindu Kitchen and Longxing Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yindu Kitchen position performs unexpectedly, Longxing Chemical 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 Longxing Chemical will offset losses from the drop in Longxing Chemical's long position.The idea behind Yindu Kitchen Equipment and Longxing Chemical Stock 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.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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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