Correlation Between Level Biotechnology and Yulon Finance

Can any of the company-specific risk be diversified away by investing in both Level Biotechnology and Yulon Finance 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 Level Biotechnology and Yulon Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Level Biotechnology and Yulon Finance

0.04

Correlation Coefficient

Level Biotechnology  Yulon Finance

Significant diversification

The 3 months correlation between Level and Yulon is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Level Biotechnology and Yulon Finance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yulon Finance Corp and Level Biotechnology 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 Level Biotechnology are associated (or correlated) with Yulon Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yulon Finance Corp has no effect on the direction of Level Biotechnology i.e., Level Biotechnology and Yulon Finance go up and down completely randomly.

Pair Corralation between Level Biotechnology and Yulon Finance

Assuming the 90 days trading horizon Level Biotechnology is expected to generate 4.97 times more return on investment than Yulon Finance. However, Level Biotechnology is 4.97 times more volatile than Yulon Finance Corp. It trades about 0.16 of its potential returns per unit of risk. Yulon Finance Corp is currently generating about 0.0 per unit of risk. If you would invest  3,170  in Level Biotechnology on December 22, 2024 and sell it today you would earn a total of  190.00  from holding Level Biotechnology or generate 5.99% return on investment over 90 days.

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

Level Biotechnology  vs.  Yulon Finance Corp

Level Biotechnology

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Level Biotechnology are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Level Biotechnology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Yulon Finance Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yulon Finance Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Yulon Finance is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Level Biotechnology and Yulon Finance

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

The idea behind Level Biotechnology and Yulon Finance Corp 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.