Correlation Between Wing Yip and Sow Good

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

Diversification Opportunities for Wing Yip and Sow Good

0.56

Correlation Coefficient

Wing Yip  Sow Good

Very weak diversification

The 3 months correlation between Wing and Sow is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Wing Yip Food and Sow Good Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sow Good Common 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 Sow Good. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sow Good Common has no effect on the direction of Wing Yip i.e., Wing Yip and Sow Good go up and down completely randomly.

Pair Corralation between Wing Yip and Sow Good

Given the investment horizon of 90 days Wing Yip Food is expected to generate 25.12 times more return on investment than Sow Good. However, Wing Yip is 25.12 times more volatile than Sow Good Common. It trades about 0.21 of its potential returns per unit of risk. Sow Good Common is currently generating about -0.03 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	Weak
Accuracy	9.36%
Values	Daily Returns

Wing Yip Food  vs.  Sow Good Common

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.

Sow Good Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sow Good Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Wing Yip and Sow Good

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

The idea behind Wing Yip Food and Sow Good Common 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.

Check out your portfolio center.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.