Correlation Between Yili Chuanning and Guilin Seamild

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

Diversification Opportunities for Yili Chuanning and Guilin Seamild

YiliGuilinDiversified AwayYiliGuilinDiversified Away100%
-0.55
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Yili and Guilin is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Yili Chuanning Biotechnology and Guilin Seamild Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guilin Seamild Foods and Yili Chuanning 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 Yili Chuanning Biotechnology are associated (or correlated) with Guilin Seamild. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guilin Seamild Foods has no effect on the direction of Yili Chuanning i.e., Yili Chuanning and Guilin Seamild go up and down completely randomly.

Pair Corralation between Yili Chuanning and Guilin Seamild

Assuming the 90 days trading horizon Yili Chuanning Biotechnology is expected to under-perform the Guilin Seamild. But the stock apears to be less risky and, when comparing its historical volatility, Yili Chuanning Biotechnology is 1.29 times less risky than Guilin Seamild. The stock trades about -0.02 of its potential returns per unit of risk. The Guilin Seamild Foods is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,418  in Guilin Seamild Foods on November 21, 2024 and sell it today you would earn a total of  150.00  from holding Guilin Seamild Foods or generate 10.58% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Yili Chuanning Biotechnology  vs.  Guilin Seamild Foods

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-1001020
JavaScript chart by amCharts 3.21.15301301 002956
       Timeline  
Yili Chuanning Biote 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Yili Chuanning Biotechnology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Yili Chuanning is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb11.51212.51313.51414.5
Guilin Seamild Foods 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Guilin Seamild Foods are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Guilin Seamild sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb131415161718

Yili Chuanning and Guilin Seamild Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.05-5.28-3.51-1.740.01.763.555.347.13 0.020.030.040.050.060.070.08
JavaScript chart by amCharts 3.21.15301301 002956
       Returns  

Pair Trading with Yili Chuanning and Guilin Seamild

The main advantage of trading using opposite Yili Chuanning and Guilin Seamild positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yili Chuanning position performs unexpectedly, Guilin Seamild 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 Guilin Seamild will offset losses from the drop in Guilin Seamild's long position.
The idea behind Yili Chuanning Biotechnology and Guilin Seamild Foods 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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