Correlation Between Global X and YUMY

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

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

Diversification Opportunities for Global X and YUMY

0.0

Correlation Coefficient

Global X  YUMY

Pay attention - limited upside

The 3 months correlation between Global and YUMY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Global X Wind and YUMY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YUMY and Global X 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 Global X Wind 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 Global X i.e., Global X and YUMY go up and down completely randomly.

Pair Corralation between Global X and YUMY

If you would invest  1,072  in Global X Wind on December 27, 2024 and sell it today you would earn a total of  46.00  from holding Global X Wind or generate 4.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Global X Wind  vs.  YUMY

Global X Wind

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Wind are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, Global X is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

YUMY

Risk-Adjusted Performance

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 Global X and YUMY

The main advantage of trading using opposite Global X and YUMY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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 Global X Wind 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.