Correlation Between Natural Health and Yunji
Can any of the company-specific risk be diversified away by investing in both Natural Health 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 Natural Health and Yunji into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Health Trend and Yunji Inc, you can compare the effects of market volatilities on Natural Health 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 Natural Health with a short position of Yunji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Health and Yunji.
Diversification Opportunities for Natural Health and Yunji
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Natural and Yunji is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Natural Health Trend and Yunji Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunji Inc and Natural Health 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 Natural Health Trend 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 Natural Health i.e., Natural Health and Yunji go up and down completely randomly.
Pair Corralation between Natural Health and Yunji
Given the investment horizon of 90 days Natural Health Trend is expected to generate 0.35 times more return on investment than Yunji. However, Natural Health Trend is 2.84 times less risky than Yunji. It trades about -0.08 of its potential returns per unit of risk. Yunji Inc is currently generating about -0.07 per unit of risk. If you would invest 582.00 in Natural Health Trend on August 28, 2024 and sell it today you would lose (30.00) from holding Natural Health Trend or give up 5.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Health Trend vs. Yunji Inc
Performance |
| Timeline |
| Natural Health Trend |
| Yunji Inc |
Natural Health and Yunji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Health and Yunji
The main advantage of trading using opposite Natural Health and Yunji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Health 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.| Natural Health vs. Inter Parfums | Natural Health vs. European Wax Center | Natural Health vs. Yatsen Holding | Natural Health vs. Edgewell Personal Care |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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