Correlation Between Youyou Foods Co and Guizhou Chanhen
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By analyzing existing cross correlation between Youyou Foods Co and Guizhou Chanhen Chemical, you can compare the effects of market volatilities on Youyou Foods Co and Guizhou Chanhen 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 Guizhou Chanhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youyou Foods Co and Guizhou Chanhen.
Diversification Opportunities for Youyou Foods Co and Guizhou Chanhen
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Youyou and Guizhou is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Youyou Foods Co and Guizhou Chanhen Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guizhou Chanhen Chemical 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 Guizhou Chanhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guizhou Chanhen Chemical has no effect on the direction of Youyou Foods Co i.e., Youyou Foods Co and Guizhou Chanhen go up and down completely randomly.
Pair Corralation between Youyou Foods Co and Guizhou Chanhen
Assuming the 90 days trading horizon Youyou Foods Co is expected to under-perform the Guizhou Chanhen. In addition to that, Youyou Foods Co is 1.47 times more volatile than Guizhou Chanhen Chemical. It trades about -0.19 of its total potential returns per unit of risk. Guizhou Chanhen Chemical is currently generating about -0.05 per unit of volatility. If you would invest 2,232 in Guizhou Chanhen Chemical on November 8, 2024 and sell it today you would lose (38.00) from holding Guizhou Chanhen Chemical or give up 1.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youyou Foods Co vs. Guizhou Chanhen Chemical
Performance |
| Timeline |
| Youyou Foods Co |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Guizhou Chanhen Chemical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Youyou Foods Co and Guizhou Chanhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youyou Foods Co and Guizhou Chanhen
The main advantage of trading using opposite Youyou Foods Co and Guizhou Chanhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youyou Foods Co position performs unexpectedly, Guizhou Chanhen 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 Guizhou Chanhen will offset losses from the drop in Guizhou Chanhen's long position.The idea behind Youyou Foods Co and Guizhou Chanhen Chemical 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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