Correlation Between Beijing Jiaman and Yankershop Food

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

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

Diversification Opportunities for Beijing Jiaman and Yankershop Food

0.0

Correlation Coefficient

Beijing Jiaman  Yankershop Food

Pay attention - limited upside

The 3 months correlation between Beijing and Yankershop is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Jiaman Dress and Yankershop Food Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yankershop Food and Beijing Jiaman 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 Beijing Jiaman Dress are associated (or correlated) with Yankershop Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yankershop Food has no effect on the direction of Beijing Jiaman i.e., Beijing Jiaman and Yankershop Food go up and down completely randomly.

Pair Corralation between Beijing Jiaman and Yankershop Food

Assuming the 90 days trading horizon Beijing Jiaman Dress is expected to under-perform the Yankershop Food. But the stock apears to be less risky and, when comparing its historical volatility, Beijing Jiaman Dress is 1.17 times less risky than Yankershop Food. The stock trades about -0.04 of its potential returns per unit of risk. The Yankershop Food Co is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  5,374  in Yankershop Food Co on October 6, 2024 and sell it today you would earn a total of  966.00  from holding Yankershop Food Co or generate 17.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	97.73%
Values	Daily Returns

Beijing Jiaman Dress  vs.  Yankershop Food Co

Beijing Jiaman Dress

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beijing Jiaman Dress has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Yankershop Food

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yankershop Food Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Yankershop Food sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Beijing Jiaman and Yankershop Food

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

The idea behind Beijing Jiaman Dress and Yankershop Food 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.