Correlation Between Yunji and NWTN

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

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

Diversification Opportunities for Yunji and NWTN

-0.61

Correlation Coefficient

Yunji  NWTN

Excellent diversification

The 3 months correlation between Yunji and NWTN is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Yunji Inc and NWTN Class B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NWTN Class B 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 NWTN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NWTN Class B has no effect on the direction of Yunji i.e., Yunji and NWTN go up and down completely randomly.

Pair Corralation between Yunji and NWTN

Allowing for the 90-day total investment horizon Yunji Inc is expected to generate 0.52 times more return on investment than NWTN. However, Yunji Inc is 1.91 times less risky than NWTN. It trades about 0.04 of its potential returns per unit of risk. NWTN Class B is currently generating about -0.12 per unit of risk. If you would invest  169.00  in Yunji Inc on December 27, 2024 and sell it today you would earn a total of  9.00  from holding Yunji Inc or generate 5.33% return on investment over 90 days.

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

Yunji Inc  vs.  NWTN Class B

Yunji Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Yunji Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward-looking indicators, Yunji may actually be approaching a critical reversion point that can send shares even higher in April 2025.

NWTN Class B

Risk-Adjusted Performance

Very Weak

Over the last 90 days NWTN Class B has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Yunji and NWTN

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

The idea behind Yunji Inc and NWTN Class B 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.