Correlation Between Youyou Foods and Chahua Modern
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By analyzing existing cross correlation between Youyou Foods Co and Chahua Modern Housewares, you can compare the effects of market volatilities on Youyou Foods and Chahua Modern 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 Chahua Modern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youyou Foods and Chahua Modern.
Diversification Opportunities for Youyou Foods and Chahua Modern
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Youyou and Chahua is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Youyou Foods Co and Chahua Modern Housewares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chahua Modern Housewares 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 Chahua Modern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chahua Modern Housewares has no effect on the direction of Youyou Foods i.e., Youyou Foods and Chahua Modern go up and down completely randomly.
Pair Corralation between Youyou Foods and Chahua Modern
Assuming the 90 days trading horizon Youyou Foods is expected to generate 5.26 times less return on investment than Chahua Modern. But when comparing it to its historical volatility, Youyou Foods Co is 1.3 times less risky than Chahua Modern. It trades about 0.02 of its potential returns per unit of risk. Chahua Modern Housewares is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 832.00 in Chahua Modern Housewares on October 30, 2024 and sell it today you would earn a total of 1,454 from holding Chahua Modern Housewares or generate 174.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youyou Foods Co vs. Chahua Modern Housewares
Performance |
| Timeline |
| Youyou Foods |
| Chahua Modern Housewares |
Youyou Foods and Chahua Modern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youyou Foods and Chahua Modern
The main advantage of trading using opposite Youyou Foods and Chahua Modern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youyou Foods position performs unexpectedly, Chahua Modern 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 Chahua Modern will offset losses from the drop in Chahua Modern's long position.| Youyou Foods vs. Markor International Home | Youyou Foods vs. Beijing Kingsoft Office | Youyou Foods vs. Ziel Home Furnishing | Youyou Foods vs. DO Home Collection |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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