Correlation Between Youyou Foods and Nanhua Bio
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By analyzing existing cross correlation between Youyou Foods Co and Nanhua Bio Medicine, you can compare the effects of market volatilities on Youyou Foods and Nanhua Bio 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 Youyou Foods with a short position of Nanhua Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youyou Foods and Nanhua Bio.
Diversification Opportunities for Youyou Foods and Nanhua Bio
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Youyou and Nanhua is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Youyou Foods Co and Nanhua Bio Medicine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanhua Bio Medicine and Youyou Foods 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 Youyou Foods Co are associated (or correlated) with Nanhua Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanhua Bio Medicine has no effect on the direction of Youyou Foods i.e., Youyou Foods and Nanhua Bio go up and down completely randomly.
Pair Corralation between Youyou Foods and Nanhua Bio
Assuming the 90 days trading horizon Youyou Foods Co is expected to generate 1.49 times more return on investment than Nanhua Bio. However, Youyou Foods is 1.49 times more volatile than Nanhua Bio Medicine. It trades about 0.3 of its potential returns per unit of risk. Nanhua Bio Medicine is currently generating about 0.0 per unit of risk. If you would invest 809.00 in Youyou Foods Co on August 30, 2024 and sell it today you would earn a total of 273.00 from holding Youyou Foods Co or generate 33.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youyou Foods Co vs. Nanhua Bio Medicine
Performance |
| Timeline |
| Youyou Foods |
| Nanhua Bio Medicine |
Youyou Foods and Nanhua Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youyou Foods and Nanhua Bio
The main advantage of trading using opposite Youyou Foods and Nanhua Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youyou Foods position performs unexpectedly, Nanhua Bio 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 Nanhua Bio will offset losses from the drop in Nanhua Bio's long position.| Youyou Foods vs. Industrial and Commercial | Youyou Foods vs. China Construction Bank | Youyou Foods vs. Agricultural Bank of | Youyou Foods vs. Bank of China |
| Nanhua Bio vs. Youyou Foods Co | Nanhua Bio vs. Industrial Bank Co | Nanhua Bio vs. Juewei Food Co | Nanhua Bio vs. HeNan Splendor Science |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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