Correlation Between Yield Guild and KEY

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

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

Diversification Opportunities for Yield Guild and KEY

0.82

Correlation Coefficient

Yield Guild  KEY

Very poor diversification

The 3 months correlation between Yield and KEY is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Yield Guild Games and KEY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEY and Yield Guild 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 Yield Guild Games are associated (or correlated) with KEY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEY has no effect on the direction of Yield Guild i.e., Yield Guild and KEY go up and down completely randomly.

Pair Corralation between Yield Guild and KEY

Assuming the 90 days trading horizon Yield Guild Games is expected to under-perform the KEY. But the crypto coin apears to be less risky and, when comparing its historical volatility, Yield Guild Games is 1.57 times less risky than KEY. The crypto coin trades about -0.21 of its potential returns per unit of risk. The KEY is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  0.09  in KEY on December 30, 2024 and sell it today you would lose (0.04) from holding KEY or give up 39.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Yield Guild Games  vs.  KEY

Yield Guild Games

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yield Guild Games has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Yield Guild Games shareholders.

KEY

Risk-Adjusted Performance

Very Weak

Over the last 90 days KEY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for KEY shareholders.

Pair Trading with Yield Guild and KEY

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

The idea behind Yield Guild Games and KEY 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .