Correlation Between Yancoal Australia and Focus Home

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

By analyzing existing cross correlation between Yancoal Australia and Focus Home Interactive, you can compare the effects of market volatilities on Yancoal Australia and Focus Home 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 Yancoal Australia with a short position of Focus Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yancoal Australia and Focus Home.

Diversification Opportunities for Yancoal Australia and Focus Home

0.0

Correlation Coefficient

Yancoal Australia  Focus Home

Pay attention - limited upside

The 3 months correlation between Yancoal and Focus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Yancoal Australia and Focus Home Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Home Interactive and Yancoal Australia 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 Yancoal Australia are associated (or correlated) with Focus Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Home Interactive has no effect on the direction of Yancoal Australia i.e., Yancoal Australia and Focus Home go up and down completely randomly.

Pair Corralation between Yancoal Australia and Focus Home

If you would invest  2,125  in Focus Home Interactive on October 11, 2024 and sell it today you would earn a total of  95.00  from holding Focus Home Interactive or generate 4.47% return on investment over 90 days.

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

Yancoal Australia  vs.  Focus Home Interactive

Yancoal Australia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yancoal Australia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Yancoal Australia is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Focus Home Interactive

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Focus Home Interactive are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Focus Home may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Yancoal Australia and Focus Home

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

The idea behind Yancoal Australia and Focus Home Interactive 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.