Correlation Between Shanghai Shuixing and Yankershop Food
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By analyzing existing cross correlation between Shanghai Shuixing Home and Yankershop Food Co, you can compare the effects of market volatilities on Shanghai Shuixing and Yankershop Food 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 Shanghai Shuixing with a short position of Yankershop Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Shuixing and Yankershop Food.
Diversification Opportunities for Shanghai Shuixing and Yankershop Food
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Yankershop is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Shuixing Home and Yankershop Food Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yankershop Food and Shanghai Shuixing 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 Shanghai Shuixing Home are associated (or correlated) with Yankershop Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yankershop Food has no effect on the direction of Shanghai Shuixing i.e., Shanghai Shuixing and Yankershop Food go up and down completely randomly.
Pair Corralation between Shanghai Shuixing and Yankershop Food
Assuming the 90 days trading horizon Shanghai Shuixing Home is expected to under-perform the Yankershop Food. In addition to that, Shanghai Shuixing is 1.14 times more volatile than Yankershop Food Co. It trades about -0.35 of its total potential returns per unit of risk. Yankershop Food Co is currently generating about -0.32 per unit of volatility. If you would invest 6,035 in Yankershop Food Co on November 7, 2024 and sell it today you would lose (703.00) from holding Yankershop Food Co or give up 11.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Shuixing Home vs. Yankershop Food Co
Performance |
| Timeline |
| Shanghai Shuixing Home |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Yankershop Food |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shanghai Shuixing and Yankershop Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Shuixing and Yankershop Food
The main advantage of trading using opposite Shanghai Shuixing and Yankershop Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Shuixing position performs unexpectedly, Yankershop Food 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 Yankershop Food will offset losses from the drop in Yankershop Food's long position.The idea behind Shanghai Shuixing Home and Yankershop Food Co 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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