Correlation Between Alphabet and Yong Concrete

Can any of the company-specific risk be diversified away by investing in both Alphabet and Yong Concrete 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 Yong Concrete 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 Yong Concrete PCL, you can compare the effects of market volatilities on Alphabet and Yong Concrete 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 Yong Concrete. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Yong Concrete.

Diversification Opportunities for Alphabet and Yong Concrete

-0.86

Correlation Coefficient

Alphabet  Yong Concrete

Pay attention - limited upside

The 3 months correlation between Alphabet and Yong is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Yong Concrete PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yong Concrete PCL 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 Yong Concrete. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yong Concrete PCL has no effect on the direction of Alphabet i.e., Alphabet and Yong Concrete go up and down completely randomly.

Pair Corralation between Alphabet and Yong Concrete

Given the investment horizon of 90 days Alphabet Inc Class C is expected to generate 0.64 times more return on investment than Yong Concrete. However, Alphabet Inc Class C is 1.56 times less risky than Yong Concrete. It trades about 0.08 of its potential returns per unit of risk. Yong Concrete PCL is currently generating about -0.04 per unit of risk. If you would invest  10,107  in Alphabet Inc Class C on October 23, 2024 and sell it today you would earn a total of  9,648  from holding Alphabet Inc Class C or generate 95.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	96.96%
Values	Daily Returns

Alphabet Inc Class C  vs.  Yong Concrete PCL

Alphabet Class C

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alphabet Inc Class C are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Alphabet reported solid returns over the last few months and may actually be approaching a breakup point.

Yong Concrete PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yong Concrete PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Alphabet and Yong Concrete

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

The idea behind Alphabet Inc Class C and Yong Concrete PCL 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .