Correlation Between E Split and Yangarra Resources

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

By analyzing existing cross correlation between E Split Corp and Yangarra Resources, you can compare the effects of market volatilities on E Split and Yangarra Resources 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 E Split with a short position of Yangarra Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Split and Yangarra Resources.

Diversification Opportunities for E Split and Yangarra Resources

-0.53

Correlation Coefficient

E Split  Yangarra Resources

Excellent diversification

The 3 months correlation between ENS and Yangarra is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding E Split Corp and Yangarra Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yangarra Resources and E Split 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 E Split Corp are associated (or correlated) with Yangarra Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yangarra Resources has no effect on the direction of E Split i.e., E Split and Yangarra Resources go up and down completely randomly.

Pair Corralation between E Split and Yangarra Resources

Assuming the 90 days trading horizon E Split Corp is expected to generate 0.42 times more return on investment than Yangarra Resources. However, E Split Corp is 2.39 times less risky than Yangarra Resources. It trades about 0.22 of its potential returns per unit of risk. Yangarra Resources is currently generating about -0.02 per unit of risk. If you would invest  1,217  in E Split Corp on September 3, 2024 and sell it today you would earn a total of  160.00  from holding E Split Corp or generate 13.15% return on investment over 90 days.

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

E Split Corp  vs.  Yangarra Resources

E Split Corp

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in E Split Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, E Split may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Yangarra Resources

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with E Split and Yangarra Resources

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

The idea behind E Split Corp and Yangarra Resources 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.