Correlation Between JuneYao Dairy and Rising Nonferrous

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

Diversification Opportunities for JuneYao Dairy and Rising Nonferrous

JuneYaoRisingDiversified AwayJuneYaoRisingDiversified Away100%
0.73
  Correlation Coefficient

Poor diversification

The 3 months correlation between JuneYao and Rising is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding JuneYao Dairy Co and Rising Nonferrous Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rising Nonferrous Metals and JuneYao Dairy 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 JuneYao Dairy Co are associated (or correlated) with Rising Nonferrous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rising Nonferrous Metals has no effect on the direction of JuneYao Dairy i.e., JuneYao Dairy and Rising Nonferrous go up and down completely randomly.

Pair Corralation between JuneYao Dairy and Rising Nonferrous

Assuming the 90 days trading horizon JuneYao Dairy Co is expected to generate 1.17 times more return on investment than Rising Nonferrous. However, JuneYao Dairy is 1.17 times more volatile than Rising Nonferrous Metals. It trades about 0.29 of its potential returns per unit of risk. Rising Nonferrous Metals is currently generating about 0.15 per unit of risk. If you would invest  445.00  in JuneYao Dairy Co on September 13, 2024 and sell it today you would earn a total of  375.00  from holding JuneYao Dairy Co or generate 84.27% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy98.28%
ValuesDaily Returns

JuneYao Dairy Co  vs.  Rising Nonferrous Metals

 Performance 
JavaScript chart by amCharts 3.21.15OctNov 0102030405060
JavaScript chart by amCharts 3.21.15605388 600259
       Timeline  
JuneYao Dairy 

Risk-Adjusted Performance

22 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in JuneYao Dairy Co are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, JuneYao Dairy sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec4.555.566.577.58
Rising Nonferrous Metals 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Rising Nonferrous Metals are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Rising Nonferrous sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec24262830323436

JuneYao Dairy and Rising Nonferrous Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-10.77-8.07-5.36-2.660.02.865.878.8811.8814.89 0.0150.0200.0250.0300.0350.040
JavaScript chart by amCharts 3.21.15605388 600259
       Returns  

Pair Trading with JuneYao Dairy and Rising Nonferrous

The main advantage of trading using opposite JuneYao Dairy and Rising Nonferrous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JuneYao Dairy position performs unexpectedly, Rising Nonferrous 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 Rising Nonferrous will offset losses from the drop in Rising Nonferrous' long position.
The idea behind JuneYao Dairy Co and Rising Nonferrous Metals 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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