Correlation Between Build A and Yunji
Can any of the company-specific risk be diversified away by investing in both Build A and Yunji at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Build A and Yunji into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Build A Bear Workshop and Yunji Inc, you can compare the effects of market volatilities on Build A and Yunji 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 Build A with a short position of Yunji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Build A and Yunji.
Diversification Opportunities for Build A and Yunji
Very good diversification
The 3 months correlation between Build and Yunji is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Build A Bear Workshop and Yunji Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunji Inc and Build A 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 Build A Bear Workshop are associated (or correlated) with Yunji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunji Inc has no effect on the direction of Build A i.e., Build A and Yunji go up and down completely randomly.
Pair Corralation between Build A and Yunji
Considering the 90-day investment horizon Build A Bear Workshop is expected to generate 0.33 times more return on investment than Yunji. However, Build A Bear Workshop is 3.07 times less risky than Yunji. It trades about -0.02 of its potential returns per unit of risk. Yunji Inc is currently generating about -0.09 per unit of risk. If you would invest 3,879 in Build A Bear Workshop on August 27, 2024 and sell it today you would lose (60.00) from holding Build A Bear Workshop or give up 1.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Build A Bear Workshop vs. Yunji Inc
Performance |
| Timeline |
| Build A Bear |
| Yunji Inc |
Build A and Yunji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Build A and Yunji
The main advantage of trading using opposite Build A and Yunji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Build A position performs unexpectedly, Yunji 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 Yunji will offset losses from the drop in Yunji's long position.The idea behind Build A Bear Workshop and Yunji Inc 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.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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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