Correlation Between Tingyi (Cayman and NH Foods

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

By analyzing existing cross correlation between Tingyi Holding Corp and NH Foods Ltd, you can compare the effects of market volatilities on Tingyi (Cayman and NH Foods 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 Tingyi (Cayman with a short position of NH Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tingyi (Cayman and NH Foods.

Diversification Opportunities for Tingyi (Cayman and NH Foods

0.0

Correlation Coefficient

Tingyi (Cayman  NH Foods

Pay attention - limited upside

The 3 months correlation between Tingyi and NIPMY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tingyi Holding Corp and NH Foods Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH Foods and Tingyi (Cayman 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 Tingyi Holding Corp are associated (or correlated) with NH Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH Foods has no effect on the direction of Tingyi (Cayman i.e., Tingyi (Cayman and NH Foods go up and down completely randomly.

Pair Corralation between Tingyi (Cayman and NH Foods

Assuming the 90 days horizon Tingyi Holding Corp is expected to under-perform the NH Foods. But the pink sheet apears to be less risky and, when comparing its historical volatility, Tingyi Holding Corp is 1.14 times less risky than NH Foods. The pink sheet trades about -0.05 of its potential returns per unit of risk. The NH Foods Ltd is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  1,952  in NH Foods Ltd on February 4, 2024 and sell it today you would lose (327.00) from holding NH Foods Ltd or give up 16.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	74.34%
Values	Daily Returns

Tingyi Holding Corp  vs.  NH Foods Ltd

Tingyi Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tingyi Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Tingyi (Cayman is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

NH Foods

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NH Foods Ltd are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile primary indicators, NH Foods may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Tingyi (Cayman and NH Foods

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

The idea behind Tingyi Holding Corp and NH Foods Ltd 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.