Correlation Between Fujian Anjoy and Servyou Software

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

Diversification Opportunities for Fujian Anjoy and Servyou Software

FujianServyouDiversified AwayFujianServyouDiversified Away100%
0.68
  Correlation Coefficient

Poor diversification

The 3 months correlation between Fujian and Servyou is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Anjoy Foods and Servyou Software Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Servyou Software and Fujian Anjoy 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 Fujian Anjoy Foods are associated (or correlated) with Servyou Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Servyou Software has no effect on the direction of Fujian Anjoy i.e., Fujian Anjoy and Servyou Software go up and down completely randomly.

Pair Corralation between Fujian Anjoy and Servyou Software

Assuming the 90 days trading horizon Fujian Anjoy is expected to generate 1.45 times less return on investment than Servyou Software. But when comparing it to its historical volatility, Fujian Anjoy Foods is 1.1 times less risky than Servyou Software. It trades about 0.15 of its potential returns per unit of risk. Servyou Software Group is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  2,250  in Servyou Software Group on September 15, 2024 and sell it today you would earn a total of  1,116  from holding Servyou Software Group or generate 49.6% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Fujian Anjoy Foods  vs.  Servyou Software Group

 Performance 
JavaScript chart by amCharts 3.21.15OctNov 01020304050
JavaScript chart by amCharts 3.21.15603345 603171
       Timeline  
Fujian Anjoy Foods 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Fujian Anjoy Foods are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fujian Anjoy sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec707580859095100105110
Servyou Software 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Servyou Software Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Servyou Software sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec2224262830323436

Fujian Anjoy and Servyou Software Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-10.9-8.16-5.43-2.690.04562.845.748.6311.52 0.0200.0250.030
JavaScript chart by amCharts 3.21.15603345 603171
       Returns  

Pair Trading with Fujian Anjoy and Servyou Software

The main advantage of trading using opposite Fujian Anjoy and Servyou Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Anjoy position performs unexpectedly, Servyou Software 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 Servyou Software will offset losses from the drop in Servyou Software's long position.
The idea behind Fujian Anjoy Foods and Servyou Software Group 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.

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