Correlation Between Yorktown Small-cap and Api Short

Can any of the company-specific risk be diversified away by investing in both Yorktown Small-cap and Api Short 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 Yorktown Small-cap and Api Short into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yorktown Small Cap Fund and Api Short Term, you can compare the effects of market volatilities on Yorktown Small-cap and Api Short 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 Yorktown Small-cap with a short position of Api Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yorktown Small-cap and Api Short.

Diversification Opportunities for Yorktown Small-cap and Api Short

-0.46

Correlation Coefficient

Yorktown Small-cap  Api Short

Very good diversification

The 3 months correlation between Yorktown and Api is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Yorktown Small Cap Fund and Api Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Api Short Term and Yorktown Small-cap 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 Yorktown Small Cap Fund are associated (or correlated) with Api Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Api Short Term has no effect on the direction of Yorktown Small-cap i.e., Yorktown Small-cap and Api Short go up and down completely randomly.

Pair Corralation between Yorktown Small-cap and Api Short

Assuming the 90 days horizon Yorktown Small Cap Fund is expected to under-perform the Api Short. In addition to that, Yorktown Small-cap is 8.32 times more volatile than Api Short Term. It trades about -0.03 of its total potential returns per unit of risk. Api Short Term is currently generating about 0.17 per unit of volatility. If you would invest  383.00  in Api Short Term on December 20, 2024 and sell it today you would earn a total of  6.00  from holding Api Short Term or generate 1.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Yorktown Small Cap Fund  vs.  Api Short Term

Yorktown Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yorktown Small Cap Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Yorktown Small-cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Api Short Term

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Api Short Term are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Api Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Yorktown Small-cap and Api Short

The main advantage of trading using opposite Yorktown Small-cap and Api Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yorktown Small-cap position performs unexpectedly, Api Short 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 Api Short will offset losses from the drop in Api Short's long position.

The idea behind Yorktown Small Cap Fund and Api Short Term 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.