Correlation Between Yellow Pages and SMS Co,

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Yellow Pages and SMS Co, 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 Yellow Pages and SMS Co, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yellow Pages Limited and SMS Co,, you can compare the effects of market volatilities on Yellow Pages and SMS Co, 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 Yellow Pages with a short position of SMS Co,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yellow Pages and SMS Co,.

Diversification Opportunities for Yellow Pages and SMS Co,

-0.57
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Yellow and SMS is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Yellow Pages Limited and SMS Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMS Co, and Yellow Pages 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 Yellow Pages Limited are associated (or correlated) with SMS Co,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMS Co, has no effect on the direction of Yellow Pages i.e., Yellow Pages and SMS Co, go up and down completely randomly.

Pair Corralation between Yellow Pages and SMS Co,

Assuming the 90 days horizon Yellow Pages Limited is expected to generate 0.38 times more return on investment than SMS Co,. However, Yellow Pages Limited is 2.62 times less risky than SMS Co,. It trades about 0.02 of its potential returns per unit of risk. SMS Co, is currently generating about -0.02 per unit of risk. If you would invest  764.00  in Yellow Pages Limited on September 26, 2024 and sell it today you would earn a total of  26.00  from holding Yellow Pages Limited or generate 3.4% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy56.09%
ValuesDaily Returns

Yellow Pages Limited  vs.  SMS Co,

 Performance 
       Timeline  
Yellow Pages Limited 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Yellow Pages Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Yellow Pages may actually be approaching a critical reversion point that can send shares even higher in January 2025.
SMS Co, 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Weak
Over the last 90 days SMS Co, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Yellow Pages and SMS Co, Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Yellow Pages and SMS Co,

The main advantage of trading using opposite Yellow Pages and SMS Co, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yellow Pages position performs unexpectedly, SMS Co, 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 SMS Co, will offset losses from the drop in SMS Co,'s long position.
The idea behind Yellow Pages Limited and SMS Co, 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.
Check out your portfolio center.
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

Other Complementary Tools

Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Equity Valuation
Check real value of public entities based on technical and fundamental data
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges