Correlation Between Wing Yip and Maeil Dairies

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

By analyzing existing cross correlation between Wing Yip Food and Maeil Dairies Co, you can compare the effects of market volatilities on Wing Yip and Maeil Dairies 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 Wing Yip with a short position of Maeil Dairies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wing Yip and Maeil Dairies.

Diversification Opportunities for Wing Yip and Maeil Dairies

0.15

Correlation Coefficient

Wing Yip  Maeil Dairies

Average diversification

The 3 months correlation between Wing and Maeil is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Wing Yip Food and Maeil Dairies Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maeil Dairies and Wing Yip 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 Wing Yip Food are associated (or correlated) with Maeil Dairies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maeil Dairies has no effect on the direction of Wing Yip i.e., Wing Yip and Maeil Dairies go up and down completely randomly.

Pair Corralation between Wing Yip and Maeil Dairies

Assuming the 90 days trading horizon Wing Yip Food is expected to generate 6.95 times more return on investment than Maeil Dairies. However, Wing Yip is 6.95 times more volatile than Maeil Dairies Co. It trades about 0.02 of its potential returns per unit of risk. Maeil Dairies Co is currently generating about -0.15 per unit of risk. If you would invest  196,000  in Wing Yip Food on September 27, 2024 and sell it today you would lose (17,400) from holding Wing Yip Food or give up 8.88% of portfolio value over 90 days.

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

Wing Yip Food  vs.  Maeil Dairies Co

Wing Yip Food

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wing Yip Food are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Wing Yip may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Maeil Dairies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maeil Dairies Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Wing Yip and Maeil Dairies

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

The idea behind Wing Yip Food and Maeil Dairies 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.