Correlation Between Yuma Energy and Global Payment

Can any of the company-specific risk be diversified away by investing in both Yuma Energy and Global Payment 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 Yuma Energy and Global Payment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yuma Energy and Global Payment Technologies, you can compare the effects of market volatilities on Yuma Energy and Global Payment 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 Yuma Energy with a short position of Global Payment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuma Energy and Global Payment.

Diversification Opportunities for Yuma Energy and Global Payment

1.0

Correlation Coefficient

Yuma Energy  Global Payment

No risk reduction

The 3 months correlation between Yuma and Global is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Yuma Energy and Global Payment Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Payment Techn and Yuma Energy 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 Yuma Energy are associated (or correlated) with Global Payment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Payment Techn has no effect on the direction of Yuma Energy i.e., Yuma Energy and Global Payment go up and down completely randomly.

Pair Corralation between Yuma Energy and Global Payment

If you would invest  0.01  in Global Payment Technologies on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Global Payment Technologies or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	1.59%
Values	Daily Returns

Yuma Energy  vs.  Global Payment Technologies

Yuma Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yuma Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Yuma Energy is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Global Payment Techn

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Payment Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Global Payment is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Yuma Energy and Global Payment

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

The idea behind Yuma Energy and Global Payment Technologies 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.