Correlation Between Yindu Kitchen and Vontron Technology

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

By analyzing existing cross correlation between Yindu Kitchen Equipment and Vontron Technology Co, you can compare the effects of market volatilities on Yindu Kitchen and Vontron Technology 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 Yindu Kitchen with a short position of Vontron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yindu Kitchen and Vontron Technology.

Diversification Opportunities for Yindu Kitchen and Vontron Technology

0.13

Correlation Coefficient

Yindu Kitchen  Vontron Technology

Average diversification

The 3 months correlation between Yindu and Vontron is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Yindu Kitchen Equipment and Vontron Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vontron Technology and Yindu Kitchen 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 Yindu Kitchen Equipment are associated (or correlated) with Vontron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vontron Technology has no effect on the direction of Yindu Kitchen i.e., Yindu Kitchen and Vontron Technology go up and down completely randomly.

Pair Corralation between Yindu Kitchen and Vontron Technology

Assuming the 90 days trading horizon Yindu Kitchen Equipment is expected to under-perform the Vontron Technology. But the stock apears to be less risky and, when comparing its historical volatility, Yindu Kitchen Equipment is 1.04 times less risky than Vontron Technology. The stock trades about -0.05 of its potential returns per unit of risk. The Vontron Technology Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  882.00  in Vontron Technology Co on September 5, 2024 and sell it today you would earn a total of  49.00  from holding Vontron Technology Co or generate 5.56% return on investment over 90 days.

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

Yindu Kitchen Equipment  vs.  Vontron Technology Co

Yindu Kitchen Equipment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yindu Kitchen Equipment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Yindu Kitchen is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vontron Technology

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vontron Technology Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Vontron Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yindu Kitchen and Vontron Technology

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

The idea behind Yindu Kitchen Equipment and Vontron Technology Co 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.