Correlation Between Yindu Kitchen and Allmed Medical

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

By analyzing existing cross correlation between Yindu Kitchen Equipment and Allmed Medical Products, you can compare the effects of market volatilities on Yindu Kitchen and Allmed Medical 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 Yindu Kitchen with a short position of Allmed Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yindu Kitchen and Allmed Medical.

Diversification Opportunities for Yindu Kitchen and Allmed Medical

-0.34

Correlation Coefficient

Yindu Kitchen  Allmed Medical

Very good diversification

The 3 months correlation between Yindu and Allmed is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Yindu Kitchen Equipment and Allmed Medical Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allmed Medical Products and Yindu Kitchen 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 Yindu Kitchen Equipment are associated (or correlated) with Allmed Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allmed Medical Products has no effect on the direction of Yindu Kitchen i.e., Yindu Kitchen and Allmed Medical go up and down completely randomly.

Pair Corralation between Yindu Kitchen and Allmed Medical

Assuming the 90 days trading horizon Yindu Kitchen Equipment is expected to under-perform the Allmed Medical. But the stock apears to be less risky and, when comparing its historical volatility, Yindu Kitchen Equipment is 1.29 times less risky than Allmed Medical. The stock trades about -0.01 of its potential returns per unit of risk. The Allmed Medical Products is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  930.00  in Allmed Medical Products on October 7, 2024 and sell it today you would lose (86.00) from holding Allmed Medical Products or give up 9.25% of portfolio value over 90 days.

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

Yindu Kitchen Equipment  vs.  Allmed Medical Products

Yindu Kitchen Equipment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yindu Kitchen Equipment 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.

Allmed Medical Products

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Yindu Kitchen and Allmed Medical

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

The idea behind Yindu Kitchen Equipment and Allmed Medical Products 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.