Correlation Between Zumiez and Yunhong Green

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

By analyzing existing cross correlation between Zumiez Inc and Yunhong Green CTI, you can compare the effects of market volatilities on Zumiez and Yunhong Green 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 Zumiez with a short position of Yunhong Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zumiez and Yunhong Green.

Diversification Opportunities for Zumiez and Yunhong Green

0.57

Correlation Coefficient

Zumiez  Yunhong Green

Very weak diversification

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

Pair Corralation between Zumiez and Yunhong Green

Given the investment horizon of 90 days Zumiez Inc is expected to under-perform the Yunhong Green. But the stock apears to be less risky and, when comparing its historical volatility, Zumiez Inc is 1.71 times less risky than Yunhong Green. The stock trades about -0.03 of its potential returns per unit of risk. The Yunhong Green CTI is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  73.00  in Yunhong Green CTI on October 6, 2024 and sell it today you would lose (5.00) from holding Yunhong Green CTI or give up 6.85% of portfolio value over 90 days.

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

Zumiez Inc  vs.  Yunhong Green CTI

Zumiez Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zumiez Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Yunhong Green CTI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yunhong Green CTI has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Stock's technical and fundamental indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

Pair Trading with Zumiez and Yunhong Green

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

The idea behind Zumiez Inc and Yunhong Green CTI 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.