Correlation Between Namchow Food and Youyou Foods
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By analyzing existing cross correlation between Namchow Food Group and Youyou Foods Co, you can compare the effects of market volatilities on Namchow Food and Youyou Foods 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 Namchow Food with a short position of Youyou Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namchow Food and Youyou Foods.
Diversification Opportunities for Namchow Food and Youyou Foods
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Namchow and Youyou is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Namchow Food Group and Youyou Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youyou Foods and Namchow Food 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 Namchow Food Group are associated (or correlated) with Youyou Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youyou Foods has no effect on the direction of Namchow Food i.e., Namchow Food and Youyou Foods go up and down completely randomly.
Pair Corralation between Namchow Food and Youyou Foods
Assuming the 90 days trading horizon Namchow Food Group is expected to under-perform the Youyou Foods. But the stock apears to be less risky and, when comparing its historical volatility, Namchow Food Group is 2.46 times less risky than Youyou Foods. The stock trades about -0.08 of its potential returns per unit of risk. The Youyou Foods Co is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 735.00 in Youyou Foods Co on August 28, 2024 and sell it today you would earn a total of 293.00 from holding Youyou Foods Co or generate 39.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Namchow Food Group vs. Youyou Foods Co
Performance |
| Timeline |
| Namchow Food Group |
| Youyou Foods |
Namchow Food and Youyou Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Namchow Food and Youyou Foods
The main advantage of trading using opposite Namchow Food and Youyou Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namchow Food position performs unexpectedly, Youyou Foods 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 Youyou Foods will offset losses from the drop in Youyou Foods' long position.| Namchow Food vs. China Petroleum Chemical | Namchow Food vs. PetroChina Co Ltd | Namchow Food vs. China State Construction | Namchow Food vs. China Railway Group |
| Youyou Foods vs. China Petroleum Chemical | Youyou Foods vs. PetroChina Co Ltd | Youyou Foods vs. China State Construction | Youyou Foods 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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