Correlation Between Youyou Foods and Aofu Environmental
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By analyzing existing cross correlation between Youyou Foods Co and Aofu Environmental Technology, you can compare the effects of market volatilities on Youyou Foods and Aofu Environmental 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 Aofu Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youyou Foods and Aofu Environmental.
Diversification Opportunities for Youyou Foods and Aofu Environmental
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Youyou and Aofu is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Youyou Foods Co and Aofu Environmental Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aofu Environmental 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 Aofu Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aofu Environmental has no effect on the direction of Youyou Foods i.e., Youyou Foods and Aofu Environmental go up and down completely randomly.
Pair Corralation between Youyou Foods and Aofu Environmental
Assuming the 90 days trading horizon Youyou Foods Co is expected to generate 1.4 times more return on investment than Aofu Environmental. However, Youyou Foods is 1.4 times more volatile than Aofu Environmental Technology. It trades about 0.21 of its potential returns per unit of risk. Aofu Environmental Technology is currently generating about 0.08 per unit of risk. If you would invest 720.00 in Youyou Foods Co on September 8, 2024 and sell it today you would earn a total of 314.00 from holding Youyou Foods Co or generate 43.61% 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. Aofu Environmental Technology
Performance |
| Timeline |
| Youyou Foods |
| Aofu Environmental |
Youyou Foods and Aofu Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youyou Foods and Aofu Environmental
The main advantage of trading using opposite Youyou Foods and Aofu Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youyou Foods position performs unexpectedly, Aofu Environmental 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 Aofu Environmental will offset losses from the drop in Aofu Environmental'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 |
| Aofu Environmental vs. Zijin Mining Group | Aofu Environmental vs. Shandong Gold Mining | Aofu Environmental vs. Inner Mongolia BaoTou | Aofu Environmental vs. Jiangxi Ganfeng Lithium |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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