Correlation Between Grape King and Yung Zip

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

By analyzing existing cross correlation between Grape King Bio and Yung Zip Chemical, you can compare the effects of market volatilities on Grape King and Yung Zip 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 Grape King with a short position of Yung Zip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grape King and Yung Zip.

Diversification Opportunities for Grape King and Yung Zip

0.29

Correlation Coefficient

Grape King  Yung Zip

Modest diversification

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

Pair Corralation between Grape King and Yung Zip

Assuming the 90 days trading horizon Grape King Bio is expected to under-perform the Yung Zip. But the stock apears to be less risky and, when comparing its historical volatility, Grape King Bio is 2.44 times less risky than Yung Zip. The stock trades about -0.12 of its potential returns per unit of risk. The Yung Zip Chemical is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3,015  in Yung Zip Chemical on October 23, 2024 and sell it today you would earn a total of  95.00  from holding Yung Zip Chemical or generate 3.15% return on investment over 90 days.

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

Grape King Bio  vs.  Yung Zip Chemical

Grape King Bio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grape King Bio has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Grape King is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Yung Zip Chemical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yung Zip Chemical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Grape King and Yung Zip

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

The idea behind Grape King Bio and Yung Zip Chemical 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.