Correlation Between Youyou Foods and Zhengzhou Coal
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By analyzing existing cross correlation between Youyou Foods Co and Zhengzhou Coal Mining, you can compare the effects of market volatilities on Youyou Foods and Zhengzhou Coal 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 Zhengzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youyou Foods and Zhengzhou Coal.
Diversification Opportunities for Youyou Foods and Zhengzhou Coal
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Youyou and Zhengzhou is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Youyou Foods Co and Zhengzhou Coal Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhengzhou Coal Mining 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 Zhengzhou Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhengzhou Coal Mining has no effect on the direction of Youyou Foods i.e., Youyou Foods and Zhengzhou Coal go up and down completely randomly.
Pair Corralation between Youyou Foods and Zhengzhou Coal
Assuming the 90 days trading horizon Youyou Foods Co is expected to generate 1.28 times more return on investment than Zhengzhou Coal. However, Youyou Foods is 1.28 times more volatile than Zhengzhou Coal Mining. It trades about 0.06 of its potential returns per unit of risk. Zhengzhou Coal Mining is currently generating about -0.03 per unit of risk. If you would invest 760.00 in Youyou Foods Co on August 25, 2024 and sell it today you would earn a total of 207.00 from holding Youyou Foods Co or generate 27.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youyou Foods Co vs. Zhengzhou Coal Mining
Performance |
| Timeline |
| Youyou Foods |
| Zhengzhou Coal Mining |
Youyou Foods and Zhengzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youyou Foods and Zhengzhou Coal
The main advantage of trading using opposite Youyou Foods and Zhengzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youyou Foods position performs unexpectedly, Zhengzhou Coal 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 Zhengzhou Coal will offset losses from the drop in Zhengzhou Coal's long position.| Youyou Foods vs. Hubeiyichang Transportation Group | Youyou Foods vs. Jiujiang Shanshui Technology | Youyou Foods vs. Fujian Longzhou Transportation | Youyou Foods vs. Dazhong Transportation Group |
| Zhengzhou Coal vs. Sichuan Yahua Industrial | Zhengzhou Coal vs. Zhongyin Babi Food | Zhengzhou Coal vs. Beijing Sanyuan Foods | Zhengzhou Coal vs. Youyou Foods Co |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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