Correlation Between Yulon Finance and Hi Lai

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

Diversification Opportunities for Yulon Finance and Hi Lai

-0.21
  Correlation Coefficient

Very good diversification

The 3 months correlation between Yulon and 1268 is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Finance Corp and Hi Lai Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Lai Foods and Yulon Finance 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 Yulon Finance Corp are associated (or correlated) with Hi Lai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Lai Foods has no effect on the direction of Yulon Finance i.e., Yulon Finance and Hi Lai go up and down completely randomly.

Pair Corralation between Yulon Finance and Hi Lai

Assuming the 90 days trading horizon Yulon Finance is expected to generate 698.0 times less return on investment than Hi Lai. But when comparing it to its historical volatility, Yulon Finance Corp is 5.6 times less risky than Hi Lai. It trades about 0.0 of its potential returns per unit of risk. Hi Lai Foods Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  15,000  in Hi Lai Foods Co on October 22, 2024 and sell it today you would earn a total of  200.00  from holding Hi Lai Foods Co or generate 1.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Yulon Finance Corp  vs.  Hi Lai Foods Co

 Performance 
       Timeline  
Yulon Finance Corp 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Yulon Finance Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Yulon Finance is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
Hi Lai Foods 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Hi Lai Foods Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Hi Lai is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Yulon Finance and Hi Lai Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Yulon Finance and Hi Lai

The main advantage of trading using opposite Yulon Finance and Hi Lai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Finance position performs unexpectedly, Hi Lai 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 Hi Lai will offset losses from the drop in Hi Lai's long position.
The idea behind Yulon Finance Corp and Hi Lai Foods 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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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