Correlation Between Cambricon Technologies and Youyou Foods Co
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By analyzing existing cross correlation between Cambricon Technologies Corp and Youyou Foods Co, you can compare the effects of market volatilities on Cambricon Technologies and Youyou Foods Co 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 Cambricon Technologies with a short position of Youyou Foods Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambricon Technologies and Youyou Foods Co.
Diversification Opportunities for Cambricon Technologies and Youyou Foods Co
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cambricon and Youyou is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Cambricon Technologies Corp and Youyou Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youyou Foods Co and Cambricon Technologies 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 Cambricon Technologies Corp are associated (or correlated) with Youyou Foods Co. 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 Co has no effect on the direction of Cambricon Technologies i.e., Cambricon Technologies and Youyou Foods Co go up and down completely randomly.
Pair Corralation between Cambricon Technologies and Youyou Foods Co
Assuming the 90 days trading horizon Cambricon Technologies Corp is expected to under-perform the Youyou Foods Co. In addition to that, Cambricon Technologies is 2.2 times more volatile than Youyou Foods Co. It trades about -0.1 of its total potential returns per unit of risk. Youyou Foods Co is currently generating about -0.15 per unit of volatility. If you would invest 1,049 in Youyou Foods Co on November 3, 2024 and sell it today you would lose (73.00) from holding Youyou Foods Co or give up 6.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambricon Technologies Corp vs. Youyou Foods Co
Performance |
| Timeline |
| Cambricon Technologies |
| Youyou Foods Co |
Cambricon Technologies and Youyou Foods Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambricon Technologies and Youyou Foods Co
The main advantage of trading using opposite Cambricon Technologies and Youyou Foods Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambricon Technologies position performs unexpectedly, Youyou Foods Co 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 Co will offset losses from the drop in Youyou Foods Co's long position.The idea behind Cambricon Technologies Corp and Youyou Foods Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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