Correlation Between XinJiang GuoTong and Youngy Health

Can any of the company-specific risk be diversified away by investing in both XinJiang GuoTong and Youngy Health 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 XinJiang GuoTong and Youngy Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between XinJiang GuoTong Pipeline and Youngy Health Co, you can compare the effects of market volatilities on XinJiang GuoTong and Youngy Health 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 XinJiang GuoTong with a short position of Youngy Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of XinJiang GuoTong and Youngy Health.

Diversification Opportunities for XinJiang GuoTong and Youngy Health

0.71

Correlation Coefficient

XinJiang GuoTong  Youngy Health

Poor diversification

The 3 months correlation between XinJiang and Youngy is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding XinJiang GuoTong Pipeline and Youngy Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngy Health and XinJiang GuoTong 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 XinJiang GuoTong Pipeline are associated (or correlated) with Youngy Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngy Health has no effect on the direction of XinJiang GuoTong i.e., XinJiang GuoTong and Youngy Health go up and down completely randomly.

Pair Corralation between XinJiang GuoTong and Youngy Health

Assuming the 90 days trading horizon XinJiang GuoTong is expected to generate 1.82 times less return on investment than Youngy Health. But when comparing it to its historical volatility, XinJiang GuoTong Pipeline is 1.04 times less risky than Youngy Health. It trades about 0.03 of its potential returns per unit of risk. Youngy Health Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  286.00  in Youngy Health Co on October 9, 2024 and sell it today you would earn a total of  54.00  from holding Youngy Health Co or generate 18.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

XinJiang GuoTong Pipeline  vs.  Youngy Health Co

XinJiang GuoTong Pipeline

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XinJiang GuoTong Pipeline has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, XinJiang GuoTong is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Youngy Health

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Youngy Health Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Youngy Health sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with XinJiang GuoTong and Youngy Health

The main advantage of trading using opposite XinJiang GuoTong and Youngy Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XinJiang GuoTong position performs unexpectedly, Youngy Health 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 Youngy Health will offset losses from the drop in Youngy Health's long position.

The idea behind XinJiang GuoTong Pipeline and Youngy Health 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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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.