Correlation Between Yunji and Hour Loop

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

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

Diversification Opportunities for Yunji and Hour Loop

-0.55

Correlation Coefficient

Yunji  Hour Loop

Excellent diversification

The 3 months correlation between Yunji and Hour is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Yunji Inc and Hour Loop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hour Loop 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 Hour Loop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hour Loop has no effect on the direction of Yunji i.e., Yunji and Hour Loop go up and down completely randomly.

Pair Corralation between Yunji and Hour Loop

Allowing for the 90-day total investment horizon Yunji Inc is expected to generate 1.1 times more return on investment than Hour Loop. However, Yunji is 1.1 times more volatile than Hour Loop. It trades about -0.01 of its potential returns per unit of risk. Hour Loop is currently generating about -0.03 per unit of risk. If you would invest  77.00  in Yunji Inc on March 5, 2024 and sell it today you would lose (2.00) from holding Yunji Inc or give up 2.6% of portfolio value over 90 days.

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

Yunji Inc  vs.  Hour Loop

Yunji Inc

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Yunji Inc are ranked lower than 2 (%) 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 July 2024.

Hour Loop

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hour Loop has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in July 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Yunji and Hour Loop

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

The idea behind Yunji Inc and Hour Loop 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.