Correlation Between Youyou Foods Co and NAURA Technology

Can any of the company-specific risk be diversified away by investing in both Youyou Foods Co and NAURA Technology 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 Youyou Foods Co and NAURA Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Youyou Foods Co and NAURA Technology Group, you can compare the effects of market volatilities on Youyou Foods Co and NAURA Technology 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 Youyou Foods Co with a short position of NAURA Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youyou Foods Co and NAURA Technology.

Diversification Opportunities for Youyou Foods Co and NAURA Technology

-0.7

Correlation Coefficient

Youyou Foods Co  NAURA Technology

Excellent diversification

The 3 months correlation between Youyou and NAURA is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Youyou Foods Co and NAURA Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAURA Technology and Youyou Foods Co 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 Youyou Foods Co are associated (or correlated) with NAURA Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAURA Technology has no effect on the direction of Youyou Foods Co i.e., Youyou Foods Co and NAURA Technology go up and down completely randomly.

Pair Corralation between Youyou Foods Co and NAURA Technology

Assuming the 90 days trading horizon Youyou Foods Co is expected to generate 7.61 times less return on investment than NAURA Technology. In addition to that, Youyou Foods Co is 1.02 times more volatile than NAURA Technology Group. It trades about 0.01 of its total potential returns per unit of risk. NAURA Technology Group is currently generating about 0.05 per unit of volatility. If you would invest  27,091  in NAURA Technology Group on December 4, 2024 and sell it today you would earn a total of  15,960  from holding NAURA Technology Group or generate 58.91% return on investment over 90 days.

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

Youyou Foods Co  vs.  NAURA Technology Group

Youyou Foods Co

Risk-Adjusted Performance

Very Weak

Over the last 90 days Youyou Foods Co 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

NAURA Technology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NAURA Technology Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, NAURA Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Youyou Foods Co and NAURA Technology

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

The idea behind Youyou Foods Co and NAURA Technology 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.