Correlation Between Youyou Foods Co and Tonghua Grape
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By analyzing existing cross correlation between Youyou Foods Co and Tonghua Grape Wine, you can compare the effects of market volatilities on Youyou Foods Co and Tonghua Grape 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 Tonghua Grape. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youyou Foods Co and Tonghua Grape.
Diversification Opportunities for Youyou Foods Co and Tonghua Grape
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Youyou and Tonghua is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Youyou Foods Co and Tonghua Grape Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tonghua Grape Wine 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 Tonghua Grape. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tonghua Grape Wine has no effect on the direction of Youyou Foods Co i.e., Youyou Foods Co and Tonghua Grape go up and down completely randomly.
Pair Corralation between Youyou Foods Co and Tonghua Grape
Assuming the 90 days trading horizon Youyou Foods Co is expected to generate 2.08 times more return on investment than Tonghua Grape. However, Youyou Foods Co is 2.08 times more volatile than Tonghua Grape Wine. It trades about 0.3 of its potential returns per unit of risk. Tonghua Grape Wine is currently generating about 0.12 per unit of risk. If you would invest 869.00 in Youyou Foods Co on September 1, 2024 and sell it today you would earn a total of 273.00 from holding Youyou Foods Co or generate 31.42% 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. Tonghua Grape Wine
Performance |
| Timeline |
| Youyou Foods Co |
| Tonghua Grape Wine |
Youyou Foods Co and Tonghua Grape Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youyou Foods Co and Tonghua Grape
The main advantage of trading using opposite Youyou Foods Co and Tonghua Grape positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youyou Foods Co position performs unexpectedly, Tonghua Grape 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 Tonghua Grape will offset losses from the drop in Tonghua Grape's long position.| Youyou Foods Co vs. Xiangyang Automobile Bearing | Youyou Foods Co vs. Sichuan Teway Food | Youyou Foods Co vs. CIMC Vehicles Co | Youyou Foods Co vs. Gan Yuan Foods |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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