Correlation Between Gan Yuan and V V

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

By analyzing existing cross correlation between Gan Yuan Foods and V V Food, you can compare the effects of market volatilities on Gan Yuan and V V 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 Gan Yuan with a short position of V V. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gan Yuan and V V.

Diversification Opportunities for Gan Yuan and V V

0.17

Correlation Coefficient

Gan Yuan  V V

Average diversification

The 3 months correlation between Gan and 600300 is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Gan Yuan Foods and V V Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V V Food and Gan Yuan 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 Gan Yuan Foods are associated (or correlated) with V V. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V V Food has no effect on the direction of Gan Yuan i.e., Gan Yuan and V V go up and down completely randomly.

Pair Corralation between Gan Yuan and V V

Assuming the 90 days trading horizon Gan Yuan is expected to generate 43.49 times less return on investment than V V. But when comparing it to its historical volatility, Gan Yuan Foods is 1.11 times less risky than V V. It trades about 0.0 of its potential returns per unit of risk. V V Food is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  302.00  in V V Food on November 28, 2024 and sell it today you would earn a total of  21.00  from holding V V Food or generate 6.95% return on investment over 90 days.

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

Gan Yuan Foods  vs.  V V Food

Gan Yuan Foods

Risk-Adjusted Performance

Very Weak

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

V V Food

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in V V Food are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, V V may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Gan Yuan and V V

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

The idea behind Gan Yuan Foods and V V Food 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.