Correlation Between Wing Yip and Global Crossing

Can any of the company-specific risk be diversified away by investing in both Wing Yip and Global Crossing 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 Global Crossing 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 Global Crossing Airlines, you can compare the effects of market volatilities on Wing Yip and Global Crossing 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 Global Crossing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wing Yip and Global Crossing.

Diversification Opportunities for Wing Yip and Global Crossing

0.68

Correlation Coefficient

Wing Yip  Global Crossing

Poor diversification

The 3 months correlation between Wing and Global is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Wing Yip Food and Global Crossing Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Crossing Airlines 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 Global Crossing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Crossing Airlines has no effect on the direction of Wing Yip i.e., Wing Yip and Global Crossing go up and down completely randomly.

Pair Corralation between Wing Yip and Global Crossing

Given the investment horizon of 90 days Wing Yip Food is expected to generate 1.35 times more return on investment than Global Crossing. However, Wing Yip is 1.35 times more volatile than Global Crossing Airlines. It trades about 0.21 of its potential returns per unit of risk. Global Crossing Airlines is currently generating about 0.15 per unit of risk. If you would invest  446.00  in Wing Yip Food on January 7, 2025 and sell it today you would earn a total of  474.00  from holding Wing Yip Food or generate 106.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Wing Yip Food  vs.  Global Crossing Airlines

Wing Yip Food

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wing Yip Food are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, Wing Yip reported solid returns over the last few months and may actually be approaching a breakup point.

Global Crossing Airlines

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global Crossing Airlines are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Global Crossing reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wing Yip and Global Crossing

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

The idea behind Wing Yip Food and Global Crossing Airlines 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.