Correlation Between Yonyu Plastics and Orient Pharma

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Can any of the company-specific risk be diversified away by investing in both Yonyu Plastics and Orient Pharma 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 Yonyu Plastics and Orient Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yonyu Plastics Co and Orient Pharma Co, you can compare the effects of market volatilities on Yonyu Plastics and Orient Pharma 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 Yonyu Plastics with a short position of Orient Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yonyu Plastics and Orient Pharma.

Diversification Opportunities for Yonyu Plastics and Orient Pharma

YonyuOrientDiversified AwayYonyuOrientDiversified Away100%
-0.01
  Correlation Coefficient

Good diversification

The 3 months correlation between Yonyu and Orient is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Yonyu Plastics Co and Orient Pharma Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Pharma and Yonyu Plastics 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 Yonyu Plastics Co are associated (or correlated) with Orient Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Pharma has no effect on the direction of Yonyu Plastics i.e., Yonyu Plastics and Orient Pharma go up and down completely randomly.

Pair Corralation between Yonyu Plastics and Orient Pharma

Assuming the 90 days trading horizon Yonyu Plastics is expected to generate 8.29 times less return on investment than Orient Pharma. But when comparing it to its historical volatility, Yonyu Plastics Co is 3.99 times less risky than Orient Pharma. It trades about 0.02 of its potential returns per unit of risk. Orient Pharma Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3,455  in Orient Pharma Co on October 26, 2024 and sell it today you would earn a total of  245.00  from holding Orient Pharma Co or generate 7.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Yonyu Plastics Co  vs.  Orient Pharma Co

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -505101520
JavaScript chart by amCharts 3.21.151323 4166
       Timeline  
Yonyu Plastics 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Yonyu Plastics Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Yonyu Plastics is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan2424.52525.52626.5
Orient Pharma 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Orient Pharma Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Orient Pharma showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan35404550

Yonyu Plastics and Orient Pharma Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.48-2.6-1.73-0.860.01470.881.762.643.52 0.050.100.150.200.250.30
JavaScript chart by amCharts 3.21.151323 4166
       Returns  

Pair Trading with Yonyu Plastics and Orient Pharma

The main advantage of trading using opposite Yonyu Plastics and Orient Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yonyu Plastics position performs unexpectedly, Orient Pharma 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 Orient Pharma will offset losses from the drop in Orient Pharma's long position.
The idea behind Yonyu Plastics Co and Orient Pharma 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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