Correlation Between Youyou Foods and Panda Dairy
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By analyzing existing cross correlation between Youyou Foods Co and Panda Dairy Corp, you can compare the effects of market volatilities on Youyou Foods and Panda Dairy 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 Panda Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youyou Foods and Panda Dairy.
Diversification Opportunities for Youyou Foods and Panda Dairy
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Youyou and Panda is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Youyou Foods Co and Panda Dairy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panda Dairy Corp 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 Panda Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panda Dairy Corp has no effect on the direction of Youyou Foods i.e., Youyou Foods and Panda Dairy go up and down completely randomly.
Pair Corralation between Youyou Foods and Panda Dairy
Assuming the 90 days trading horizon Youyou Foods is expected to generate 2.05 times less return on investment than Panda Dairy. But when comparing it to its historical volatility, Youyou Foods Co is 1.29 times less risky than Panda Dairy. It trades about 0.03 of its potential returns per unit of risk. Panda Dairy Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,129 in Panda Dairy Corp on September 12, 2024 and sell it today you would earn a total of 872.00 from holding Panda Dairy Corp or generate 40.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youyou Foods Co vs. Panda Dairy Corp
Performance |
| Timeline |
| Youyou Foods |
| Panda Dairy Corp |
Youyou Foods and Panda Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youyou Foods and Panda Dairy
The main advantage of trading using opposite Youyou Foods and Panda Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youyou Foods position performs unexpectedly, Panda Dairy 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 Panda Dairy will offset losses from the drop in Panda Dairy'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 |
| Panda Dairy vs. China Petroleum Chemical | Panda Dairy vs. PetroChina Co Ltd | Panda Dairy vs. China State Construction | Panda Dairy vs. China Railway Group |
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 Stocks Directory module to find actively traded stocks across global markets.
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