Correlation Between Youyou Foods and Zhejiang Dahua
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By analyzing existing cross correlation between Youyou Foods Co and Zhejiang Dahua Technology, you can compare the effects of market volatilities on Youyou Foods and Zhejiang Dahua 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 Zhejiang Dahua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youyou Foods and Zhejiang Dahua.
Diversification Opportunities for Youyou Foods and Zhejiang Dahua
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Youyou and Zhejiang is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Youyou Foods Co and Zhejiang Dahua Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Dahua Technology 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 Zhejiang Dahua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Dahua Technology has no effect on the direction of Youyou Foods i.e., Youyou Foods and Zhejiang Dahua go up and down completely randomly.
Pair Corralation between Youyou Foods and Zhejiang Dahua
Assuming the 90 days trading horizon Youyou Foods Co is expected to generate 1.21 times more return on investment than Zhejiang Dahua. However, Youyou Foods is 1.21 times more volatile than Zhejiang Dahua Technology. It trades about 0.04 of its potential returns per unit of risk. Zhejiang Dahua Technology is currently generating about 0.0 per unit of risk. If you would invest 900.00 in Youyou Foods Co on September 12, 2024 and sell it today you would earn a total of 178.00 from holding Youyou Foods Co or generate 19.78% 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. Zhejiang Dahua Technology
Performance |
| Timeline |
| Youyou Foods |
| Zhejiang Dahua Technology |
Youyou Foods and Zhejiang Dahua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youyou Foods and Zhejiang Dahua
The main advantage of trading using opposite Youyou Foods and Zhejiang Dahua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youyou Foods position performs unexpectedly, Zhejiang Dahua 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 Zhejiang Dahua will offset losses from the drop in Zhejiang Dahua's long position.| Youyou Foods vs. China Petroleum Chemical | Youyou Foods vs. PetroChina Co Ltd | Youyou Foods vs. China State Construction | Youyou Foods vs. China Railway Group |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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