Correlation Between Yunji and AutoZone

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

By analyzing existing cross correlation between Yunji Inc and AutoZone, you can compare the effects of market volatilities on Yunji and AutoZone 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 Yunji with a short position of AutoZone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunji and AutoZone.

Diversification Opportunities for Yunji and AutoZone

-0.3

Correlation Coefficient

Yunji  AutoZone

Very good diversification

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

Pair Corralation between Yunji and AutoZone

Allowing for the 90-day total investment horizon Yunji is expected to generate 3.42 times less return on investment than AutoZone. In addition to that, Yunji is 5.82 times more volatile than AutoZone. It trades about 0.0 of its total potential returns per unit of risk. AutoZone is currently generating about 0.08 per unit of volatility. If you would invest  254,665  in AutoZone on October 7, 2024 and sell it today you would earn a total of  72,213  from holding AutoZone or generate 28.36% return on investment over 90 days.

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

Yunji Inc  vs.  AutoZone

Yunji Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yunji Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's forward-looking indicators remain relatively steady which may send shares a bit higher in February 2025. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

AutoZone

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AutoZone are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, AutoZone may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Yunji and AutoZone

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

The idea behind Yunji Inc and AutoZone 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.