Correlation Between Yuenglings Ice and Glanbia Plc

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

By analyzing existing cross correlation between Yuenglings Ice Cream and Glanbia plc, you can compare the effects of market volatilities on Yuenglings Ice and Glanbia Plc 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 Yuenglings Ice with a short position of Glanbia Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuenglings Ice and Glanbia Plc.

Diversification Opportunities for Yuenglings Ice and Glanbia Plc

0.6

Correlation Coefficient

Yuenglings Ice  Glanbia Plc

Poor diversification

The 3 months correlation between Yuenglings and Glanbia is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Yuenglings Ice Cream and Glanbia plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glanbia plc and Yuenglings Ice 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 Yuenglings Ice Cream are associated (or correlated) with Glanbia Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glanbia plc has no effect on the direction of Yuenglings Ice i.e., Yuenglings Ice and Glanbia Plc go up and down completely randomly.

Pair Corralation between Yuenglings Ice and Glanbia Plc

Given the investment horizon of 90 days Yuenglings Ice Cream is expected to generate 10.77 times more return on investment than Glanbia Plc. However, Yuenglings Ice is 10.77 times more volatile than Glanbia plc. It trades about 0.18 of its potential returns per unit of risk. Glanbia plc is currently generating about -0.02 per unit of risk. If you would invest  0.18  in Yuenglings Ice Cream on September 26, 2024 and sell it today you would earn a total of  0.11  from holding Yuenglings Ice Cream or generate 61.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Yuenglings Ice Cream  vs.  Glanbia plc

Yuenglings Ice Cream

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Yuenglings Ice Cream are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Yuenglings Ice displayed solid returns over the last few months and may actually be approaching a breakup point.

Glanbia plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Glanbia plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Yuenglings Ice and Glanbia Plc

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

The idea behind Yuenglings Ice Cream and Glanbia plc 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.