Correlation Between Wing Yip and Nocera

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

Diversification Opportunities for Wing Yip and Nocera

0.37

Correlation Coefficient

Wing Yip  Nocera

Weak diversification

The 3 months correlation between Wing and Nocera is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Wing Yip Food and Nocera Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nocera Inc 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 Nocera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nocera Inc has no effect on the direction of Wing Yip i.e., Wing Yip and Nocera go up and down completely randomly.

Pair Corralation between Wing Yip and Nocera

Given the investment horizon of 90 days Wing Yip Food is expected to generate 29.55 times more return on investment than Nocera. However, Wing Yip is 29.55 times more volatile than Nocera Inc. It trades about 0.21 of its potential returns per unit of risk. Nocera Inc is currently generating about 0.01 per unit of risk. If you would invest  0.00  in Wing Yip Food on October 3, 2024 and sell it today you would earn a total of  600.00  from holding Wing Yip Food or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	9.36%
Values	Daily Returns

Wing Yip Food  vs.  Nocera Inc

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 conflicting technical indicators, Wing Yip reported solid returns over the last few months and may actually be approaching a breakup point.

Nocera Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nocera Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Nocera is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Wing Yip and Nocera

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

The idea behind Wing Yip Food and Nocera Inc 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.