Correlation Between Youyou Foods Co and Hunan Mendale
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By analyzing existing cross correlation between Youyou Foods Co and Hunan Mendale Hometextile, you can compare the effects of market volatilities on Youyou Foods Co and Hunan Mendale 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 Co with a short position of Hunan Mendale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youyou Foods Co and Hunan Mendale.
Diversification Opportunities for Youyou Foods Co and Hunan Mendale
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Youyou and Hunan is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Youyou Foods Co and Hunan Mendale Hometextile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Mendale Hometextile and Youyou Foods Co 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 Hunan Mendale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Mendale Hometextile has no effect on the direction of Youyou Foods Co i.e., Youyou Foods Co and Hunan Mendale go up and down completely randomly.
Pair Corralation between Youyou Foods Co and Hunan Mendale
Assuming the 90 days trading horizon Youyou Foods Co is expected to generate 0.83 times more return on investment than Hunan Mendale. However, Youyou Foods Co is 1.21 times less risky than Hunan Mendale. It trades about 0.01 of its potential returns per unit of risk. Hunan Mendale Hometextile is currently generating about -0.02 per unit of risk. If you would invest 975.00 in Youyou Foods Co on November 9, 2024 and sell it today you would lose (53.00) from holding Youyou Foods Co or give up 5.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youyou Foods Co vs. Hunan Mendale Hometextile
Performance |
| Timeline |
| Youyou Foods Co |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Hunan Mendale Hometextile |
Risk-Adjusted Performance
Modest
Weak | Strong |
Youyou Foods Co and Hunan Mendale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youyou Foods Co and Hunan Mendale
The main advantage of trading using opposite Youyou Foods Co and Hunan Mendale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youyou Foods Co position performs unexpectedly, Hunan Mendale 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 Hunan Mendale will offset losses from the drop in Hunan Mendale's long position.The idea behind Youyou Foods Co and Hunan Mendale Hometextile 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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