Correlation Between YHN Acquisition and Cohen Circle

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

By analyzing existing cross correlation between YHN Acquisition I and Cohen Circle Acquisition, you can compare the effects of market volatilities on YHN Acquisition and Cohen Circle 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 YHN Acquisition with a short position of Cohen Circle. Check out your portfolio center. Please also check ongoing floating volatility patterns of YHN Acquisition and Cohen Circle.

Diversification Opportunities for YHN Acquisition and Cohen Circle

0.2

Correlation Coefficient

YHN Acquisition  Cohen Circle

Modest diversification

The 3 months correlation between YHN and Cohen is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding YHN Acquisition I and Cohen Circle Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Circle Acquisition and YHN Acquisition 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 YHN Acquisition I are associated (or correlated) with Cohen Circle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Circle Acquisition has no effect on the direction of YHN Acquisition i.e., YHN Acquisition and Cohen Circle go up and down completely randomly.

Pair Corralation between YHN Acquisition and Cohen Circle

Assuming the 90 days horizon YHN Acquisition is expected to generate 2.22 times less return on investment than Cohen Circle. In addition to that, YHN Acquisition is 1.42 times more volatile than Cohen Circle Acquisition. It trades about 0.1 of its total potential returns per unit of risk. Cohen Circle Acquisition is currently generating about 0.31 per unit of volatility. If you would invest  44.00  in Cohen Circle Acquisition on December 5, 2024 and sell it today you would earn a total of  115.00  from holding Cohen Circle Acquisition or generate 261.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	76.92%
Values	Daily Returns

YHN Acquisition I  vs.  Cohen Circle Acquisition

YHN Acquisition I

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in YHN Acquisition I are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, YHN Acquisition reported solid returns over the last few months and may actually be approaching a breakup point.

Cohen Circle Acquisition

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Circle Acquisition are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Cohen Circle showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with YHN Acquisition and Cohen Circle

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

The idea behind YHN Acquisition I and Cohen Circle Acquisition 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.