Correlation Between Broad Capital and YHN Acquisition

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

By analyzing existing cross correlation between Broad Capital Acquisition and YHN Acquisition I, you can compare the effects of market volatilities on Broad Capital and YHN Acquisition 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 Broad Capital with a short position of YHN Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broad Capital and YHN Acquisition.

Diversification Opportunities for Broad Capital and YHN Acquisition

0.0

Correlation Coefficient

Broad Capital  YHN Acquisition

Pay attention - limited upside

The 3 months correlation between Broad and YHN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Broad Capital Acquisition and YHN Acquisition I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YHN Acquisition I and Broad Capital 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 Broad Capital Acquisition are associated (or correlated) with YHN Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YHN Acquisition I has no effect on the direction of Broad Capital i.e., Broad Capital and YHN Acquisition go up and down completely randomly.

Pair Corralation between Broad Capital and YHN Acquisition

If you would invest  13.00  in YHN Acquisition I on December 25, 2024 and sell it today you would earn a total of  6.88  from holding YHN Acquisition I or generate 52.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Broad Capital Acquisition  vs.  YHN Acquisition I

Broad Capital Acquisition

Risk-Adjusted Performance

Very Weak

Over the last 90 days Broad Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Broad Capital is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

YHN Acquisition I

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in YHN Acquisition I are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, YHN Acquisition reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Broad Capital and YHN Acquisition

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

The idea behind Broad Capital Acquisition and YHN Acquisition I 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.