Correlation Between YHN Acquisition and Roth CH

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Can any of the company-specific risk be diversified away by investing in both YHN Acquisition and Roth CH 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 Roth CH 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 Roth CH Acquisition, you can compare the effects of market volatilities on YHN Acquisition and Roth CH 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 Roth CH. Check out your portfolio center. Please also check ongoing floating volatility patterns of YHN Acquisition and Roth CH.

Diversification Opportunities for YHN Acquisition and Roth CH

YHNRothDiversified AwayYHNRothDiversified Away100%
-0.56
  Correlation Coefficient

Excellent diversification

The 3 months correlation between YHN and Roth is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding YHN Acquisition I and Roth CH Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roth CH 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 Roth CH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roth CH Acquisition has no effect on the direction of YHN Acquisition i.e., YHN Acquisition and Roth CH go up and down completely randomly.

Pair Corralation between YHN Acquisition and Roth CH

Assuming the 90 days horizon YHN Acquisition I is expected to generate 0.59 times more return on investment than Roth CH. However, YHN Acquisition I is 1.71 times less risky than Roth CH. It trades about 0.04 of its potential returns per unit of risk. Roth CH Acquisition is currently generating about -0.03 per unit of risk. If you would invest  1,000.00  in YHN Acquisition I on September 16, 2024 and sell it today you would earn a total of  12.00  from holding YHN Acquisition I or generate 1.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy93.75%
ValuesDaily Returns

YHN Acquisition I  vs.  Roth CH Acquisition

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -4-3-2-10
JavaScript chart by amCharts 3.21.15YHNAU ROCLU
       Timeline  
YHN Acquisition I 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in YHN Acquisition I are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, YHN Acquisition is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1010.210.410.610.81111.2
Roth CH Acquisition 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Roth CH Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Roth CH is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec11.111.211.311.411.511.611.711.811.9

YHN Acquisition and Roth CH Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.81-1.35-0.89-0.43-0.0075810.410.871.331.792.25 0.20.40.60.81.01.2
JavaScript chart by amCharts 3.21.15YHNAU ROCLU
       Returns  

Pair Trading with YHN Acquisition and Roth CH

The main advantage of trading using opposite YHN Acquisition and Roth CH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YHN Acquisition position performs unexpectedly, Roth CH 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 Roth CH will offset losses from the drop in Roth CH's long position.
The idea behind YHN Acquisition I and Roth CH 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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