Correlation Between YHN Acquisition and Roma Green

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

Diversification Opportunities for YHN Acquisition and Roma Green

-0.44

Correlation Coefficient

YHN Acquisition  Roma Green

Very good diversification

The 3 months correlation between YHN and Roma is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding YHN Acquisition I and Roma Green Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roma Green Finance 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 Roma Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roma Green Finance has no effect on the direction of YHN Acquisition i.e., YHN Acquisition and Roma Green go up and down completely randomly.

Pair Corralation between YHN Acquisition and Roma Green

Assuming the 90 days horizon YHN Acquisition I is expected to generate 0.14 times more return on investment than Roma Green. However, YHN Acquisition I is 6.99 times less risky than Roma Green. It trades about 0.02 of its potential returns per unit of risk. Roma Green Finance is currently generating about -0.1 per unit of risk. If you would invest  1,009  in YHN Acquisition I on October 6, 2024 and sell it today you would earn a total of  6.00  from holding YHN Acquisition I or generate 0.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.48%
Values	Daily Returns

YHN Acquisition I  vs.  Roma Green Finance

YHN Acquisition I

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in YHN Acquisition I are ranked lower than 3 (%) 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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Roma Green Finance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Roma Green Finance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with YHN Acquisition and Roma Green

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

The idea behind YHN Acquisition I and Roma Green Finance 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.