Correlation Between Yuanli Chemical and Hawkins

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Can any of the company-specific risk be diversified away by investing in both Yuanli Chemical and Hawkins 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 Yuanli Chemical and Hawkins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuanli Chemical Group and Hawkins, you can compare the effects of market volatilities on Yuanli Chemical and Hawkins 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 Yuanli Chemical with a short position of Hawkins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanli Chemical and Hawkins.

Diversification Opportunities for Yuanli Chemical and Hawkins

-0.29
  Correlation Coefficient

Very good diversification

The 3 months correlation between Yuanli and Hawkins is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Yuanli Chemical Group and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins and Yuanli Chemical 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 Yuanli Chemical Group are associated (or correlated) with Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of Yuanli Chemical i.e., Yuanli Chemical and Hawkins go up and down completely randomly.

Pair Corralation between Yuanli Chemical and Hawkins

Assuming the 90 days trading horizon Yuanli Chemical Group is expected to under-perform the Hawkins. In addition to that, Yuanli Chemical is 1.05 times more volatile than Hawkins. It trades about -0.17 of its total potential returns per unit of risk. Hawkins is currently generating about 0.21 per unit of volatility. If you would invest  13,925  in Hawkins on October 10, 2025 and sell it today you would earn a total of  874.00  from holding Hawkins or generate 6.28% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

Yuanli Chemical Group  vs.  Hawkins

 Performance 
       Timeline  
Yuanli Chemical Group 

Risk-Adjusted Performance

Mild

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Yuanli Chemical Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Yuanli Chemical sustained solid returns over the last few months and may actually be approaching a breakup point.
Hawkins 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Hawkins has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's forward-looking signals remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Yuanli Chemical and Hawkins Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Yuanli Chemical and Hawkins

The main advantage of trading using opposite Yuanli Chemical and Hawkins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanli Chemical position performs unexpectedly, Hawkins 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 Hawkins will offset losses from the drop in Hawkins' long position.
The idea behind Yuanli Chemical Group and Hawkins 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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