Correlation Between So Young and EUDA Health

Can any of the company-specific risk be diversified away by investing in both So Young and EUDA Health 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 So Young and EUDA Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between So Young International and EUDA Health Holdings, you can compare the effects of market volatilities on So Young and EUDA Health 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 So Young with a short position of EUDA Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of So Young and EUDA Health.

Diversification Opportunities for So Young and EUDA Health

-0.45

Correlation Coefficient

So Young  EUDA Health

Very good diversification

The 3 months correlation between So Young and EUDA is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding So Young International and EUDA Health Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EUDA Health Holdings and So Young 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 So Young International are associated (or correlated) with EUDA Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EUDA Health Holdings has no effect on the direction of So Young i.e., So Young and EUDA Health go up and down completely randomly.

Pair Corralation between So Young and EUDA Health

Allowing for the 90-day total investment horizon So Young International is expected to generate 0.75 times more return on investment than EUDA Health. However, So Young International is 1.34 times less risky than EUDA Health. It trades about 0.11 of its potential returns per unit of risk. EUDA Health Holdings is currently generating about -0.02 per unit of risk. If you would invest  78.00  in So Young International on December 28, 2024 and sell it today you would earn a total of  17.00  from holding So Young International or generate 21.79% return on investment over 90 days.

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

So Young International  vs.  EUDA Health Holdings

So Young International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in So Young International are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, So Young showed solid returns over the last few months and may actually be approaching a breakup point.

EUDA Health Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days EUDA Health Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's fundamental 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 So Young and EUDA Health

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

The idea behind So Young International and EUDA Health Holdings 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.