Correlation Between Borealis Foods and Wing Yip

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

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

Diversification Opportunities for Borealis Foods and Wing Yip

0.81

Correlation Coefficient

Borealis Foods  Wing Yip

Very poor diversification

The 3 months correlation between Borealis and Wing is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Borealis Foods and Wing Yip Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wing Yip Food and Borealis Foods 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 Borealis Foods are associated (or correlated) with Wing Yip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wing Yip Food has no effect on the direction of Borealis Foods i.e., Borealis Foods and Wing Yip go up and down completely randomly.

Pair Corralation between Borealis Foods and Wing Yip

Assuming the 90 days horizon Borealis Foods is expected to generate 1.89 times less return on investment than Wing Yip. But when comparing it to its historical volatility, Borealis Foods is 1.09 times less risky than Wing Yip. It trades about 0.11 of its potential returns per unit of risk. Wing Yip Food is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  463.00  in Wing Yip Food on January 3, 2025 and sell it today you would earn a total of  436.00  from holding Wing Yip Food or generate 94.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	83.87%
Values	Daily Returns

Borealis Foods  vs.  Wing Yip Food

Borealis Foods

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Borealis Foods are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Borealis Foods showed solid returns over the last few months and may actually be approaching a breakup point.

Wing Yip Food

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wing Yip Food are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical indicators, Wing Yip reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Borealis Foods and Wing Yip

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

The idea behind Borealis Foods and Wing Yip 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.