Correlation Between High Performance and Wing Yip

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

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

Diversification Opportunities for High Performance and Wing Yip

0.0

Correlation Coefficient

High Performance  Wing Yip

Pay attention - limited upside

The 3 months correlation between High and Wing is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding High Performance Beverages and Wing Yip Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wing Yip Food and High Performance 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 High Performance Beverages are associated (or correlated) with Wing Yip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wing Yip Food has no effect on the direction of High Performance i.e., High Performance and Wing Yip go up and down completely randomly.

Pair Corralation between High Performance and Wing Yip

Given the investment horizon of 90 days High Performance Beverages is expected to generate 1.89 times more return on investment than Wing Yip. However, High Performance is 1.89 times more volatile than Wing Yip Food. It trades about 0.34 of its potential returns per unit of risk. Wing Yip Food is currently generating about 0.18 per unit of risk. If you would invest  0.01  in High Performance Beverages on October 12, 2024 and sell it today you would lose (0.01) from holding High Performance Beverages or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	6.28%
Values	Daily Returns

High Performance Beverages  vs.  Wing Yip Food

High Performance Bev

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days High Performance Beverages has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, High Performance is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Wing Yip Food

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wing Yip Food are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical indicators, Wing Yip reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with High Performance and Wing Yip

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

The idea behind High Performance Beverages and Wing Yip Food 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.