Correlation Between Yunji and Sea

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

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

Diversification Opportunities for Yunji and Sea

0.26

Correlation Coefficient

Yunji  Sea

Modest diversification

The 3 months correlation between Yunji and Sea is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Yunji Inc and Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea 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 Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea has no effect on the direction of Yunji i.e., Yunji and Sea go up and down completely randomly.

Pair Corralation between Yunji and Sea

Allowing for the 90-day total investment horizon Yunji is expected to generate 1.14 times less return on investment than Sea. In addition to that, Yunji is 1.55 times more volatile than Sea. It trades about 0.06 of its total potential returns per unit of risk. Sea is currently generating about 0.11 per unit of volatility. If you would invest  10,965  in Sea on December 25, 2024 and sell it today you would earn a total of  2,067  from holding Sea or generate 18.85% return on investment over 90 days.

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

Yunji Inc  vs.  Sea

Yunji Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Yunji Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward-looking indicators, Yunji revealed solid returns over the last few months and may actually be approaching a breakup point.

Sea

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sea are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Sea exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yunji and Sea

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

The idea behind Yunji Inc and Sea 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.