Correlation Between YY Group and Loyalty Ventures

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

By analyzing existing cross correlation between YY Group Holding and Loyalty Ventures, you can compare the effects of market volatilities on YY Group and Loyalty Ventures 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 YY Group with a short position of Loyalty Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of YY Group and Loyalty Ventures.

Diversification Opportunities for YY Group and Loyalty Ventures

-0.73

Correlation Coefficient

YY Group  Loyalty Ventures

Pay attention - limited upside

The 3 months correlation between YYGH and Loyalty is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding YY Group Holding and Loyalty Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loyalty Ventures and YY Group 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 YY Group Holding are associated (or correlated) with Loyalty Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loyalty Ventures has no effect on the direction of YY Group i.e., YY Group and Loyalty Ventures go up and down completely randomly.

Pair Corralation between YY Group and Loyalty Ventures

Given the investment horizon of 90 days YY Group Holding is expected to generate 0.19 times more return on investment than Loyalty Ventures. However, YY Group Holding is 5.37 times less risky than Loyalty Ventures. It trades about 0.0 of its potential returns per unit of risk. Loyalty Ventures is currently generating about -0.16 per unit of risk. If you would invest  290.00  in YY Group Holding on October 5, 2024 and sell it today you would lose (117.00) from holding YY Group Holding or give up 40.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	14.04%
Values	Daily Returns

YY Group Holding  vs.  Loyalty Ventures

YY Group Holding

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in YY Group Holding are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting technical and fundamental indicators, YY Group demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Loyalty Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with YY Group and Loyalty Ventures

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

The idea behind YY Group Holding and Loyalty Ventures 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.