Correlation Between Alphabet and Yoma Strategic

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

By analyzing existing cross correlation between Alphabet Inc Class C and Yoma Strategic Holdings, you can compare the effects of market volatilities on Alphabet and Yoma Strategic 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 Alphabet with a short position of Yoma Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Yoma Strategic.

Diversification Opportunities for Alphabet and Yoma Strategic

-0.23

Correlation Coefficient

Alphabet  Yoma Strategic

Very good diversification

The 3 months correlation between Alphabet and Yoma is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Yoma Strategic Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yoma Strategic Holdings and Alphabet 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 Alphabet Inc Class C are associated (or correlated) with Yoma Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yoma Strategic Holdings has no effect on the direction of Alphabet i.e., Alphabet and Yoma Strategic go up and down completely randomly.

Pair Corralation between Alphabet and Yoma Strategic

Given the investment horizon of 90 days Alphabet Inc Class C is expected to generate 0.51 times more return on investment than Yoma Strategic. However, Alphabet Inc Class C is 1.95 times less risky than Yoma Strategic. It trades about 0.3 of its potential returns per unit of risk. Yoma Strategic Holdings is currently generating about -0.22 per unit of risk. If you would invest  17,030  in Alphabet Inc Class C on September 29, 2024 and sell it today you would earn a total of  2,374  from holding Alphabet Inc Class C or generate 13.94% return on investment over 90 days.

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

Alphabet Inc Class C  vs.  Yoma Strategic Holdings

Alphabet Class C

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alphabet Inc Class C are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Alphabet reported solid returns over the last few months and may actually be approaching a breakup point.

Yoma Strategic Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yoma Strategic Holdings 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 forward indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Alphabet and Yoma Strategic

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

The idea behind Alphabet Inc Class C and Yoma Strategic Holdings 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.