Correlation Between Yankershop Food and Fujian Newland

Can any of the company-specific risk be diversified away by investing in both Yankershop Food and Fujian Newland 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 Yankershop Food and Fujian Newland into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yankershop Food Co and Fujian Newland Computer, you can compare the effects of market volatilities on Yankershop Food and Fujian Newland 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 Yankershop Food with a short position of Fujian Newland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yankershop Food and Fujian Newland.

Diversification Opportunities for Yankershop Food and Fujian Newland

-0.17

Correlation Coefficient

Yankershop Food  Fujian Newland

Good diversification

The 3 months correlation between Yankershop and Fujian is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Yankershop Food Co and Fujian Newland Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Newland Computer and Yankershop Food 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 Yankershop Food Co are associated (or correlated) with Fujian Newland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Newland Computer has no effect on the direction of Yankershop Food i.e., Yankershop Food and Fujian Newland go up and down completely randomly.

Pair Corralation between Yankershop Food and Fujian Newland

Assuming the 90 days trading horizon Yankershop Food Co is expected to under-perform the Fujian Newland. But the stock apears to be less risky and, when comparing its historical volatility, Yankershop Food Co is 1.36 times less risky than Fujian Newland. The stock trades about 0.0 of its potential returns per unit of risk. The Fujian Newland Computer is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2,003  in Fujian Newland Computer on December 27, 2024 and sell it today you would earn a total of  711.00  from holding Fujian Newland Computer or generate 35.5% return on investment over 90 days.

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

Yankershop Food Co  vs.  Fujian Newland Computer

Yankershop Food

Risk-Adjusted Performance

Very Weak

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

Fujian Newland Computer

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fujian Newland Computer are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fujian Newland sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yankershop Food and Fujian Newland

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

The idea behind Yankershop Food Co and Fujian Newland Computer 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.