Correlation Between Yulon Finance and Dynamic Medical

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Can any of the company-specific risk be diversified away by investing in both Yulon Finance and Dynamic Medical 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 Yulon Finance and Dynamic Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yulon Finance Corp and Dynamic Medical Technologies, you can compare the effects of market volatilities on Yulon Finance and Dynamic Medical 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 Yulon Finance with a short position of Dynamic Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Finance and Dynamic Medical.

Diversification Opportunities for Yulon Finance and Dynamic Medical

0.62
  Correlation Coefficient

Poor diversification

The 3 months correlation between Yulon and Dynamic is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Finance Corp and Dynamic Medical Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynamic Medical Tech and Yulon Finance 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 Yulon Finance Corp are associated (or correlated) with Dynamic Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynamic Medical Tech has no effect on the direction of Yulon Finance i.e., Yulon Finance and Dynamic Medical go up and down completely randomly.

Pair Corralation between Yulon Finance and Dynamic Medical

Assuming the 90 days trading horizon Yulon Finance Corp is expected to under-perform the Dynamic Medical. But the stock apears to be less risky and, when comparing its historical volatility, Yulon Finance Corp is 10.46 times less risky than Dynamic Medical. The stock trades about -0.03 of its potential returns per unit of risk. The Dynamic Medical Technologies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  8,970  in Dynamic Medical Technologies on October 6, 2024 and sell it today you would earn a total of  200.00  from holding Dynamic Medical Technologies or generate 2.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy97.73%
ValuesDaily Returns

Yulon Finance Corp  vs.  Dynamic Medical Technologies

 Performance 
       Timeline  
Yulon Finance Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 latest stock price uproar, may contribute to short-horizon losses for the private investors.
Dynamic Medical Tech 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Dynamic Medical Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Dynamic Medical is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Yulon Finance and Dynamic Medical Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Yulon Finance and Dynamic Medical

The main advantage of trading using opposite Yulon Finance and Dynamic Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Finance position performs unexpectedly, Dynamic Medical 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 Dynamic Medical will offset losses from the drop in Dynamic Medical's long position.
The idea behind Yulon Finance Corp and Dynamic Medical Technologies 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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