Correlation Between Youyou Foods and China Longyuan
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By analyzing existing cross correlation between Youyou Foods Co and China Longyuan Power, you can compare the effects of market volatilities on Youyou Foods and China Longyuan 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 China Longyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youyou Foods and China Longyuan.
Diversification Opportunities for Youyou Foods and China Longyuan
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Youyou and China is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Youyou Foods Co and China Longyuan Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Longyuan Power 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 China Longyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Longyuan Power has no effect on the direction of Youyou Foods i.e., Youyou Foods and China Longyuan go up and down completely randomly.
Pair Corralation between Youyou Foods and China Longyuan
Assuming the 90 days trading horizon Youyou Foods Co is expected to generate 1.83 times more return on investment than China Longyuan. However, Youyou Foods is 1.83 times more volatile than China Longyuan Power. It trades about 0.35 of its potential returns per unit of risk. China Longyuan Power is currently generating about 0.01 per unit of risk. 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 |
Youyou Foods Co vs. China Longyuan Power
Performance |
| Timeline |
| Youyou Foods |
| China Longyuan Power |
Youyou Foods and China Longyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youyou Foods and China Longyuan
The main advantage of trading using opposite Youyou Foods and China Longyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youyou Foods position performs unexpectedly, China Longyuan 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 China Longyuan will offset losses from the drop in China Longyuan's long position.| Youyou Foods vs. Hubeiyichang Transportation Group | Youyou Foods vs. Jiujiang Shanshui Technology | Youyou Foods vs. Fujian Longzhou Transportation | Youyou Foods vs. Dazhong Transportation Group |
| China Longyuan vs. Youyou Foods Co | China Longyuan vs. Hang Xiao Steel | China Longyuan vs. City Development Environment | China Longyuan vs. Air China Ltd |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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