Correlation Between Yindu Kitchen and Duzhe Publishing

Can any of the company-specific risk be diversified away by investing in both Yindu Kitchen and Duzhe Publishing 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 Duzhe Publishing 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 Duzhe Publishing Media, you can compare the effects of market volatilities on Yindu Kitchen and Duzhe Publishing 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 Duzhe Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yindu Kitchen and Duzhe Publishing.

Diversification Opportunities for Yindu Kitchen and Duzhe Publishing

-0.23

Correlation Coefficient

Yindu Kitchen  Duzhe Publishing

Very good diversification

The 3 months correlation between Yindu and Duzhe is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Yindu Kitchen Equipment and Duzhe Publishing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duzhe Publishing Media 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 Duzhe Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duzhe Publishing Media has no effect on the direction of Yindu Kitchen i.e., Yindu Kitchen and Duzhe Publishing go up and down completely randomly.

Pair Corralation between Yindu Kitchen and Duzhe Publishing

Assuming the 90 days trading horizon Yindu Kitchen Equipment is expected to generate 0.96 times more return on investment than Duzhe Publishing. However, Yindu Kitchen Equipment is 1.04 times less risky than Duzhe Publishing. It trades about 0.14 of its potential returns per unit of risk. Duzhe Publishing Media is currently generating about -0.02 per unit of risk. If you would invest  2,410  in Yindu Kitchen Equipment on October 26, 2024 and sell it today you would earn a total of  168.00  from holding Yindu Kitchen Equipment or generate 6.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Yindu Kitchen Equipment  vs.  Duzhe Publishing Media

Yindu Kitchen Equipment

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Yindu Kitchen Equipment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Yindu Kitchen is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Duzhe Publishing Media

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Duzhe Publishing Media are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Duzhe Publishing 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 Duzhe Publishing

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

The idea behind Yindu Kitchen Equipment and Duzhe Publishing Media 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.