Correlation Between VanEck Morningstar and YUMY

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

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

Diversification Opportunities for VanEck Morningstar and YUMY

-0.12

Correlation Coefficient

VanEck Morningstar  YUMY

Good diversification

The 3 months correlation between VanEck and YUMY is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Morningstar Wide and YUMY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YUMY and VanEck Morningstar 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 VanEck Morningstar Wide are associated (or correlated) with YUMY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YUMY has no effect on the direction of VanEck Morningstar i.e., VanEck Morningstar and YUMY go up and down completely randomly.

Pair Corralation between VanEck Morningstar and YUMY

If you would invest  9,429  in VanEck Morningstar Wide on October 27, 2024 and sell it today you would earn a total of  152.00  from holding VanEck Morningstar Wide or generate 1.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

VanEck Morningstar Wide  vs.  YUMY

VanEck Morningstar Wide

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Morningstar Wide are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, VanEck Morningstar is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

YUMY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days YUMY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, YUMY is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with VanEck Morningstar and YUMY

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

The idea behind VanEck Morningstar Wide and YUMY 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.