Correlation Between Yangarra Resources and Spartan Delta

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

By analyzing existing cross correlation between Yangarra Resources and Spartan Delta Corp, you can compare the effects of market volatilities on Yangarra Resources and Spartan Delta 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 Yangarra Resources with a short position of Spartan Delta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yangarra Resources and Spartan Delta.

Diversification Opportunities for Yangarra Resources and Spartan Delta

0.7

Correlation Coefficient

Yangarra Resources  Spartan Delta

Poor diversification

The 3 months correlation between Yangarra and Spartan is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Yangarra Resources and Spartan Delta Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spartan Delta Corp and Yangarra Resources 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 Yangarra Resources are associated (or correlated) with Spartan Delta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spartan Delta Corp has no effect on the direction of Yangarra Resources i.e., Yangarra Resources and Spartan Delta go up and down completely randomly.

Pair Corralation between Yangarra Resources and Spartan Delta

Assuming the 90 days horizon Yangarra Resources is expected to generate 0.61 times more return on investment than Spartan Delta. However, Yangarra Resources is 1.63 times less risky than Spartan Delta. It trades about -0.05 of its potential returns per unit of risk. Spartan Delta Corp is currently generating about -0.06 per unit of risk. If you would invest  78.00  in Yangarra Resources on September 3, 2024 and sell it today you would lose (6.00) from holding Yangarra Resources or give up 7.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	89.06%
Values	Daily Returns

Yangarra Resources  vs.  Spartan Delta Corp

Yangarra Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yangarra Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Spartan Delta Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spartan Delta Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Yangarra Resources and Spartan Delta

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

The idea behind Yangarra Resources and Spartan Delta Corp 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.