Correlation Between Yageo Corp and Gold Circuit

Can any of the company-specific risk be diversified away by investing in both Yageo Corp and Gold Circuit 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 Yageo Corp and Gold Circuit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yageo Corp and Gold Circuit Electronics, you can compare the effects of market volatilities on Yageo Corp and Gold Circuit 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 Yageo Corp with a short position of Gold Circuit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yageo Corp and Gold Circuit.

Diversification Opportunities for Yageo Corp and Gold Circuit

-0.1

Correlation Coefficient

Yageo Corp  Gold Circuit

Good diversification

The 3 months correlation between Yageo and Gold is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Yageo Corp and Gold Circuit Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Circuit Electronics and Yageo Corp 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 Yageo Corp are associated (or correlated) with Gold Circuit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Circuit Electronics has no effect on the direction of Yageo Corp i.e., Yageo Corp and Gold Circuit go up and down completely randomly.

Pair Corralation between Yageo Corp and Gold Circuit

Assuming the 90 days trading horizon Yageo Corp is expected to under-perform the Gold Circuit. But the stock apears to be less risky and, when comparing its historical volatility, Yageo Corp is 1.54 times less risky than Gold Circuit. The stock trades about -0.12 of its potential returns per unit of risk. The Gold Circuit Electronics is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  19,800  in Gold Circuit Electronics on October 24, 2024 and sell it today you would earn a total of  2,100  from holding Gold Circuit Electronics or generate 10.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Yageo Corp  vs.  Gold Circuit Electronics

Yageo Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yageo Corp 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.

Gold Circuit Electronics

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Circuit Electronics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Gold Circuit may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Yageo Corp and Gold Circuit

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

The idea behind Yageo Corp and Gold Circuit Electronics 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.