Correlation Between Yunji and Gap,
Can any of the company-specific risk be diversified away by investing in both Yunji and Gap, 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 Gap, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yunji Inc and The Gap,, you can compare the effects of market volatilities on Yunji and Gap, 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 Gap,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunji and Gap,.
Diversification Opportunities for Yunji and Gap,
Very good diversification
The 3 months correlation between Yunji and Gap, is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Yunji Inc and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, 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 Gap,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gap, has no effect on the direction of Yunji i.e., Yunji and Gap, go up and down completely randomly.
Pair Corralation between Yunji and Gap,
Allowing for the 90-day total investment horizon Yunji Inc is expected to under-perform the Gap,. In addition to that, Yunji is 2.56 times more volatile than The Gap,. It trades about -0.02 of its total potential returns per unit of risk. The Gap, is currently generating about -0.03 per unit of volatility. If you would invest 2,863 in The Gap, on September 1, 2024 and sell it today you would lose (438.00) from holding The Gap, or give up 15.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yunji Inc vs. The Gap,
Performance |
| Timeline |
| Yunji Inc |
| Gap, |
Yunji and Gap, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yunji and Gap,
The main advantage of trading using opposite Yunji and Gap, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunji position performs unexpectedly, Gap, 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 Gap, will offset losses from the drop in Gap,'s long position.The idea behind Yunji Inc and The Gap, 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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