Correlation Between Vita Coco and YY Group

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

By analyzing existing cross correlation between Vita Coco and YY Group Holding, you can compare the effects of market volatilities on Vita Coco and YY Group 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 Vita Coco with a short position of YY Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vita Coco and YY Group.

Diversification Opportunities for Vita Coco and YY Group

0.3

Correlation Coefficient

Vita Coco  YY Group

Weak diversification

The 3 months correlation between Vita and YYGH is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Vita Coco and YY Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YY Group Holding and Vita Coco 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 Vita Coco are associated (or correlated) with YY Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YY Group Holding has no effect on the direction of Vita Coco i.e., Vita Coco and YY Group go up and down completely randomly.

Pair Corralation between Vita Coco and YY Group

Given the investment horizon of 90 days Vita Coco is expected to generate 0.56 times more return on investment than YY Group. However, Vita Coco is 1.78 times less risky than YY Group. It trades about 0.0 of its potential returns per unit of risk. YY Group Holding is currently generating about -0.04 per unit of risk. If you would invest  3,564  in Vita Coco on December 19, 2024 and sell it today you would lose (102.00) from holding Vita Coco or give up 2.86% of portfolio value over 90 days.

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

Vita Coco  vs.  YY Group Holding

Vita Coco

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vita Coco has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Vita Coco is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

YY Group Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days YY Group Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Vita Coco and YY Group

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

The idea behind Vita Coco and YY Group Holding 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.