Correlation Between YUMY and VanEck Morningstar

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

By analyzing existing cross correlation between YUMY and VanEck Morningstar Wide, you can compare the effects of market volatilities on YUMY and VanEck Morningstar 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 YUMY with a short position of VanEck Morningstar. Check out your portfolio center. Please also check ongoing floating volatility patterns of YUMY and VanEck Morningstar.

Diversification Opportunities for YUMY and VanEck Morningstar

0.0

Correlation Coefficient

YUMY  VanEck Morningstar

Pay attention - limited upside

The 3 months correlation between YUMY and VanEck is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding YUMY and VanEck Morningstar Wide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Morningstar Wide and YUMY 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 YUMY are associated (or correlated) with VanEck Morningstar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Morningstar Wide has no effect on the direction of YUMY i.e., YUMY and VanEck Morningstar go up and down completely randomly.

Pair Corralation between YUMY and VanEck Morningstar

If you would invest (100.00) in YUMY on December 18, 2024 and sell it today you would earn a total of  100.00  from holding YUMY or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

YUMY  vs.  VanEck Morningstar Wide

YUMY

Risk-Adjusted Performance

Very Weak

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

VanEck Morningstar Wide

Risk-Adjusted Performance

Very Weak

Over the last 90 days VanEck Morningstar Wide has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, VanEck Morningstar is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with YUMY and VanEck Morningstar

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

The idea behind YUMY and VanEck Morningstar Wide 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.