Correlation Between TRON and YY Group

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

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

Diversification Opportunities for TRON and YY Group

0.34

Correlation Coefficient

TRON  YY Group

Weak diversification

The 3 months correlation between TRON and YYGH is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding TRON 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 TRON 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 TRON 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 TRON i.e., TRON and YY Group go up and down completely randomly.

Pair Corralation between TRON and YY Group

Assuming the 90 days trading horizon TRON is expected to generate 0.83 times more return on investment than YY Group. However, TRON is 1.21 times less risky than YY Group. It trades about -0.03 of its potential returns per unit of risk. YY Group Holding is currently generating about -0.04 per unit of risk. If you would invest  25.00  in TRON on December 19, 2024 and sell it today you would lose (3.00) from holding TRON or give up 12.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

TRON  vs.  YY Group Holding

TRON

Risk-Adjusted Performance

Very Weak

Over the last 90 days TRON has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for TRON shareholders.

YY Group Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days YY Group Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with TRON and YY Group

The main advantage of trading using opposite TRON and YY Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRON 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 TRON 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.