Correlation Between Ethereum and YY Group

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

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

Diversification Opportunities for Ethereum and YY Group

0.82

Correlation Coefficient

Ethereum  YY Group

Very poor diversification

The 3 months correlation between Ethereum and YYGH is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum 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 Ethereum 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 Ethereum 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 Ethereum i.e., Ethereum and YY Group go up and down completely randomly.

Pair Corralation between Ethereum and YY Group

Assuming the 90 days trading horizon Ethereum is expected to generate 1.42 times less return on investment than YY Group. But when comparing it to its historical volatility, Ethereum is 1.04 times less risky than YY Group. It trades about 0.14 of its potential returns per unit of risk. YY Group Holding is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  115.00  in YY Group Holding on October 24, 2024 and sell it today you would earn a total of  62.00  from holding YY Group Holding or generate 53.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	93.65%
Values	Daily Returns

Ethereum  vs.  YY Group Holding

Ethereum

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ethereum are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Ethereum exhibited solid returns over the last few months and may actually be approaching a breakup point.

YY Group Holding

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in YY Group Holding are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, YY Group demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ethereum and YY Group

The main advantage of trading using opposite Ethereum and YY Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum 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 Ethereum 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.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.