Correlation Between Yunji and Arko Corp
Can any of the company-specific risk be diversified away by investing in both Yunji and Arko Corp 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 Yunji and Arko Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yunji Inc and Arko Corp, you can compare the effects of market volatilities on Yunji and Arko Corp 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 Yunji with a short position of Arko Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunji and Arko Corp.
Diversification Opportunities for Yunji and Arko Corp
Very good diversification
The 3 months correlation between Yunji and Arko is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Yunji Inc and Arko Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arko Corp and Yunji 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 Yunji Inc are associated (or correlated) with Arko Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arko Corp has no effect on the direction of Yunji i.e., Yunji and Arko Corp go up and down completely randomly.
Pair Corralation between Yunji and Arko Corp
Allowing for the 90-day total investment horizon Yunji Inc is expected to generate 1.73 times more return on investment than Arko Corp. However, Yunji is 1.73 times more volatile than Arko Corp. It trades about -0.04 of its potential returns per unit of risk. Arko Corp is currently generating about -0.13 per unit of risk. If you would invest 195.00 in Yunji Inc on September 1, 2024 and sell it today you would lose (23.00) from holding Yunji Inc or give up 11.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 66.67% |
| Values | Daily Returns |
Yunji Inc vs. Arko Corp
Performance |
| Timeline |
| Yunji Inc |
| Arko Corp |
Yunji and Arko Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yunji and Arko Corp
The main advantage of trading using opposite Yunji and Arko Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunji position performs unexpectedly, Arko Corp 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 Arko Corp will offset losses from the drop in Arko Corp's long position.The idea behind Yunji Inc and Arko Corp 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.| Arko Corp vs. Arko Corp | Arko Corp vs. Advantage Solutions | Arko Corp vs. CannBioRx Life Sciences | Arko Corp vs. GCM Grosvenor |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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