Correlation Between HOB Biotech and Youngy Health

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

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

Diversification Opportunities for HOB Biotech and Youngy Health

0.38

Correlation Coefficient

HOB Biotech  Youngy Health

Weak diversification

The 3 months correlation between HOB and Youngy is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding HOB Biotech Group and Youngy Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngy Health and HOB Biotech 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 HOB Biotech Group are associated (or correlated) with Youngy Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngy Health has no effect on the direction of HOB Biotech i.e., HOB Biotech and Youngy Health go up and down completely randomly.

Pair Corralation between HOB Biotech and Youngy Health

Assuming the 90 days trading horizon HOB Biotech Group is expected to generate 0.99 times more return on investment than Youngy Health. However, HOB Biotech Group is 1.01 times less risky than Youngy Health. It trades about -0.21 of its potential returns per unit of risk. Youngy Health Co is currently generating about -0.22 per unit of risk. If you would invest  10,223  in HOB Biotech Group on October 20, 2024 and sell it today you would lose (1,318) from holding HOB Biotech Group or give up 12.89% of portfolio value over 90 days.

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

HOB Biotech Group  vs.  Youngy Health Co

HOB Biotech Group

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HOB Biotech Group are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, HOB Biotech sustained solid returns over the last few months and may actually be approaching a breakup point.

Youngy Health

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Youngy Health Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Youngy Health may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with HOB Biotech and Youngy Health

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

The idea behind HOB Biotech Group and Youngy Health Co 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.