Correlation Between Wing Yip and Above Food

Can any of the company-specific risk be diversified away by investing in both Wing Yip and Above Food 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 Above Food 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 Above Food Ingredients, you can compare the effects of market volatilities on Wing Yip and Above Food 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 Above Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wing Yip and Above Food.

Diversification Opportunities for Wing Yip and Above Food

-0.3

Correlation Coefficient

Wing Yip  Above Food

Very good diversification

The 3 months correlation between Wing and Above is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Wing Yip Food and Above Food Ingredients in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Above Food Ingredients 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 Above Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Above Food Ingredients has no effect on the direction of Wing Yip i.e., Wing Yip and Above Food go up and down completely randomly.

Pair Corralation between Wing Yip and Above Food

Given the investment horizon of 90 days Wing Yip Food is expected to generate 7.72 times more return on investment than Above Food. However, Wing Yip is 7.72 times more volatile than Above Food Ingredients. It trades about 0.21 of its potential returns per unit of risk. Above Food Ingredients is currently generating about 0.15 per unit of risk. If you would invest  0.00  in Wing Yip Food on September 30, 2024 and sell it today you would earn a total of  570.00  from holding Wing Yip Food or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	37.5%
Values	Daily Returns

Wing Yip Food  vs.  Above Food Ingredients

Wing Yip Food

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wing Yip Food are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, Wing Yip reported solid returns over the last few months and may actually be approaching a breakup point.

Above Food Ingredients

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Above Food Ingredients are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Above Food showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wing Yip and Above Food

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

The idea behind Wing Yip Food and Above Food Ingredients 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.