Correlation Between Youyou Foods and Zhejiang Construction
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By analyzing existing cross correlation between Youyou Foods Co and Zhejiang Construction Investment, you can compare the effects of market volatilities on Youyou Foods and Zhejiang Construction 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 Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youyou Foods and Zhejiang Construction.
Diversification Opportunities for Youyou Foods and Zhejiang Construction
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Youyou and Zhejiang is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Youyou Foods Co and Zhejiang Construction Investme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Construction 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 Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Construction has no effect on the direction of Youyou Foods i.e., Youyou Foods and Zhejiang Construction go up and down completely randomly.
Pair Corralation between Youyou Foods and Zhejiang Construction
Assuming the 90 days trading horizon Youyou Foods Co is expected to generate 0.81 times more return on investment than Zhejiang Construction. However, Youyou Foods Co is 1.24 times less risky than Zhejiang Construction. It trades about 0.18 of its potential returns per unit of risk. Zhejiang Construction Investment is currently generating about 0.13 per unit of risk. If you would invest 930.00 in Youyou Foods Co on September 12, 2024 and sell it today you would earn a total of 148.00 from holding Youyou Foods Co or generate 15.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Youyou Foods Co vs. Zhejiang Construction Investme
Performance |
| Timeline |
| Youyou Foods |
| Zhejiang Construction |
Youyou Foods and Zhejiang Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youyou Foods and Zhejiang Construction
The main advantage of trading using opposite Youyou Foods and Zhejiang Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youyou Foods position performs unexpectedly, Zhejiang Construction 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 Construction will offset losses from the drop in Zhejiang Construction'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 |
| Zhejiang Construction vs. Lutian Machinery Co | Zhejiang Construction vs. PetroChina Co Ltd | Zhejiang Construction vs. Bank of China | Zhejiang Construction vs. Gansu Jiu Steel |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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