Correlation Between Wing Yip and Neo Cremar

Can any of the company-specific risk be diversified away by investing in both Wing Yip and Neo Cremar 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 Wing Yip and Neo Cremar into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wing Yip Food and Neo Cremar Co, you can compare the effects of market volatilities on Wing Yip and Neo Cremar 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 Wing Yip with a short position of Neo Cremar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wing Yip and Neo Cremar.

Diversification Opportunities for Wing Yip and Neo Cremar

0.41

Correlation Coefficient

Wing Yip  Neo Cremar

Very weak diversification

The 3 months correlation between Wing and Neo is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Wing Yip Food and Neo Cremar Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neo Cremar and Wing Yip 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 Wing Yip Food are associated (or correlated) with Neo Cremar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neo Cremar has no effect on the direction of Wing Yip i.e., Wing Yip and Neo Cremar go up and down completely randomly.

Pair Corralation between Wing Yip and Neo Cremar

Assuming the 90 days trading horizon Wing Yip Food is expected to generate 2.49 times more return on investment than Neo Cremar. However, Wing Yip is 2.49 times more volatile than Neo Cremar Co. It trades about 0.02 of its potential returns per unit of risk. Neo Cremar Co is currently generating about -0.06 per unit of risk. If you would invest  200,500  in Wing Yip Food on September 14, 2024 and sell it today you would lose (16,200) from holding Wing Yip Food or give up 8.08% of portfolio value over 90 days.

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

Wing Yip Food  vs.  Neo Cremar Co

Wing Yip Food

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wing Yip Food are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Wing Yip may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Neo Cremar

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neo Cremar Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Wing Yip and Neo Cremar

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

The idea behind Wing Yip Food and Neo Cremar Co 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.