Correlation Between Carters and Yunhong Green

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

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

Diversification Opportunities for Carters and Yunhong Green

0.38

Correlation Coefficient

Carters  Yunhong Green

Weak diversification

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

Pair Corralation between Carters and Yunhong Green

Considering the 90-day investment horizon Carters is expected to generate 0.34 times more return on investment than Yunhong Green. However, Carters is 2.96 times less risky than Yunhong Green. It trades about -0.02 of its potential returns per unit of risk. Yunhong Green CTI is currently generating about -0.03 per unit of risk. If you would invest  6,766  in Carters on October 22, 2024 and sell it today you would lose (1,410) from holding Carters or give up 20.84% of portfolio value over 90 days.

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

Carters  vs.  Yunhong Green CTI

Carters

Risk-Adjusted Performance

0 of 100

Very Weak

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

Yunhong Green CTI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yunhong Green CTI has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Stock's technical and fundamental indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

Pair Trading with Carters and Yunhong Green

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

The idea behind Carters and Yunhong Green CTI 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.

Check out your portfolio center.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.