Correlation Between Environmental Control and Yubo International

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

By analyzing existing cross correlation between Environmental Control Corp and Yubo International Biotech, you can compare the effects of market volatilities on Environmental Control and Yubo International 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 Environmental Control with a short position of Yubo International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Environmental Control and Yubo International.

Diversification Opportunities for Environmental Control and Yubo International

0.11

Correlation Coefficient

Environmental Control  Yubo International

Average diversification

The 3 months correlation between Environmental and Yubo is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Environmental Control Corp and Yubo International Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yubo International and Environmental Control 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 Environmental Control Corp are associated (or correlated) with Yubo International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yubo International has no effect on the direction of Environmental Control i.e., Environmental Control and Yubo International go up and down completely randomly.

Pair Corralation between Environmental Control and Yubo International

Given the investment horizon of 90 days Environmental Control Corp is expected to generate 10.54 times more return on investment than Yubo International. However, Environmental Control is 10.54 times more volatile than Yubo International Biotech. It trades about 0.13 of its potential returns per unit of risk. Yubo International Biotech is currently generating about 0.12 per unit of risk. If you would invest  0.80  in Environmental Control Corp on December 22, 2024 and sell it today you would earn a total of  0.18  from holding Environmental Control Corp or generate 22.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Environmental Control Corp  vs.  Yubo International Biotech

Environmental Control

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Environmental Control Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Environmental Control displayed solid returns over the last few months and may actually be approaching a breakup point.

Yubo International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yubo International Biotech are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady technical and fundamental indicators, Yubo International revealed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Environmental Control and Yubo International

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

The idea behind Environmental Control Corp and Yubo International Biotech 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.