Correlation Between Yem Chio and Shuttle

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

By analyzing existing cross correlation between Yem Chio Co and Shuttle, you can compare the effects of market volatilities on Yem Chio and Shuttle 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 Yem Chio with a short position of Shuttle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yem Chio and Shuttle.

Diversification Opportunities for Yem Chio and Shuttle

-0.23

Correlation Coefficient

Yem Chio  Shuttle

Very good diversification

The 3 months correlation between Yem and Shuttle is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Yem Chio Co and Shuttle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shuttle and Yem Chio 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 Yem Chio Co are associated (or correlated) with Shuttle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shuttle has no effect on the direction of Yem Chio i.e., Yem Chio and Shuttle go up and down completely randomly.

Pair Corralation between Yem Chio and Shuttle

Assuming the 90 days trading horizon Yem Chio is expected to generate 3.31 times less return on investment than Shuttle. But when comparing it to its historical volatility, Yem Chio Co is 1.84 times less risky than Shuttle. It trades about 0.03 of its potential returns per unit of risk. Shuttle is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,180  in Shuttle on September 29, 2024 and sell it today you would earn a total of  910.00  from holding Shuttle or generate 77.12% return on investment over 90 days.

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

Yem Chio Co  vs.  Shuttle

Yem Chio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yem Chio Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Shuttle

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shuttle are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Shuttle may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Yem Chio and Shuttle

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

The idea behind Yem Chio Co and Shuttle 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..