Correlation Between Yuan Longping and V V

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

By analyzing existing cross correlation between Yuan Longping High tech and V V Food, you can compare the effects of market volatilities on Yuan Longping and V V 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 Yuan Longping with a short position of V V. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuan Longping and V V.

Diversification Opportunities for Yuan Longping and V V

0.85

Correlation Coefficient

Yuan Longping  V V

Very poor diversification

The 3 months correlation between Yuan and 600300 is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Yuan Longping High tech and V V Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V V Food and Yuan Longping 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 Yuan Longping High tech are associated (or correlated) with V V. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V V Food has no effect on the direction of Yuan Longping i.e., Yuan Longping and V V go up and down completely randomly.

Pair Corralation between Yuan Longping and V V

Assuming the 90 days trading horizon Yuan Longping is expected to generate 2.16 times less return on investment than V V. But when comparing it to its historical volatility, Yuan Longping High tech is 1.06 times less risky than V V. It trades about 0.16 of its potential returns per unit of risk. V V Food is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  229.00  in V V Food on September 14, 2024 and sell it today you would earn a total of  155.00  from holding V V Food or generate 67.69% return on investment over 90 days.

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

Yuan Longping High tech  vs.  V V Food

Yuan Longping High

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Yuan Longping High tech are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Yuan Longping sustained solid returns over the last few months and may actually be approaching a breakup point.

V V Food

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in V V Food are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, V V sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yuan Longping and V V

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

The idea behind Yuan Longping High tech and V V Food 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.