Correlation Between Level Biotechnology and Yieh United

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

By analyzing existing cross correlation between Level Biotechnology and Yieh United Steel, you can compare the effects of market volatilities on Level Biotechnology and Yieh United 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 Yieh United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Level Biotechnology and Yieh United.

Diversification Opportunities for Level Biotechnology and Yieh United

0.77

Correlation Coefficient

Level Biotechnology  Yieh United

Poor diversification

The 3 months correlation between Level and Yieh is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Level Biotechnology and Yieh United Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yieh United Steel 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 Yieh United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yieh United Steel has no effect on the direction of Level Biotechnology i.e., Level Biotechnology and Yieh United go up and down completely randomly.

Pair Corralation between Level Biotechnology and Yieh United

Assuming the 90 days trading horizon Level Biotechnology is expected to generate 0.34 times more return on investment than Yieh United. However, Level Biotechnology is 2.92 times less risky than Yieh United. It trades about 0.18 of its potential returns per unit of risk. Yieh United Steel is currently generating about 0.06 per unit of risk. If you would invest  3,170  in Level Biotechnology on December 21, 2024 and sell it today you would earn a total of  215.00  from holding Level Biotechnology or generate 6.78% return on investment over 90 days.

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

Level Biotechnology  vs.  Yieh United Steel

Level Biotechnology

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Level Biotechnology are ranked lower than 14 (%) 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.

Yieh United Steel

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Yieh United Steel are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Yieh United may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Level Biotechnology and Yieh United

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

The idea behind Level Biotechnology and Yieh United Steel 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.