Correlation Between Cloud Live and Youyou Foods

Can any of the company-specific risk be diversified away by investing in both Cloud Live and Youyou Foods 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 Cloud Live and Youyou Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cloud Live Technology and Youyou Foods Co, you can compare the effects of market volatilities on Cloud Live and Youyou Foods 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 Cloud Live with a short position of Youyou Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloud Live and Youyou Foods.

Diversification Opportunities for Cloud Live and Youyou Foods

0.61

Correlation Coefficient

Cloud Live  Youyou Foods

Poor diversification

The 3 months correlation between Cloud and Youyou is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Cloud Live Technology and Youyou Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youyou Foods and Cloud Live 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 Cloud Live Technology are associated (or correlated) with Youyou Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youyou Foods has no effect on the direction of Cloud Live i.e., Cloud Live and Youyou Foods go up and down completely randomly.

Pair Corralation between Cloud Live and Youyou Foods

Assuming the 90 days trading horizon Cloud Live Technology is expected to generate 2.36 times more return on investment than Youyou Foods. However, Cloud Live is 2.36 times more volatile than Youyou Foods Co. It trades about 0.04 of its potential returns per unit of risk. Youyou Foods Co is currently generating about 0.01 per unit of risk. If you would invest  304.00  in Cloud Live Technology on December 25, 2024 and sell it today you would earn a total of  17.00  from holding Cloud Live Technology or generate 5.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.28%
Values	Daily Returns

Cloud Live Technology  vs.  Youyou Foods Co

Cloud Live Technology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cloud Live Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cloud Live sustained solid returns over the last few months and may actually be approaching a breakup point.

Youyou Foods

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Cloud Live and Youyou Foods

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

The idea behind Cloud Live Technology and Youyou Foods 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.