Correlation Between Yura Tech and Cots Technology
Can any of the company-specific risk be diversified away by investing in both Yura Tech and Cots Technology 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 Yura Tech and Cots Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yura Tech Co and Cots Technology Co, you can compare the effects of market volatilities on Yura Tech and Cots Technology 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 Yura Tech with a short position of Cots Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yura Tech and Cots Technology.
Diversification Opportunities for Yura Tech and Cots Technology
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yura and Cots is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Yura Tech Co and Cots Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cots Technology and Yura Tech 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 Yura Tech Co are associated (or correlated) with Cots Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cots Technology has no effect on the direction of Yura Tech i.e., Yura Tech and Cots Technology go up and down completely randomly.
Pair Corralation between Yura Tech and Cots Technology
Assuming the 90 days trading horizon Yura Tech Co is expected to under-perform the Cots Technology. But the stock apears to be less risky and, when comparing its historical volatility, Yura Tech Co is 1.61 times less risky than Cots Technology. The stock trades about -0.02 of its potential returns per unit of risk. The Cots Technology Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,040,000 in Cots Technology Co on September 2, 2024 and sell it today you would lose (490,000) from holding Cots Technology Co or give up 24.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 88.12% |
| Values | Daily Returns |
Yura Tech Co vs. Cots Technology Co
Performance |
| Timeline |
| Yura Tech |
| Cots Technology |
Yura Tech and Cots Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yura Tech and Cots Technology
The main advantage of trading using opposite Yura Tech and Cots Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yura Tech position performs unexpectedly, Cots Technology 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 Cots Technology will offset losses from the drop in Cots Technology's long position.| Yura Tech vs. LG Display | Yura Tech vs. Hyundai Motor Co | Yura Tech vs. Hyundai Motor Co | Yura Tech vs. Adaptive Plasma Technology |
| Cots Technology vs. Samsung Electronics Co | Cots Technology vs. Samsung Electronics Co | Cots Technology vs. LG Energy Solution | Cots Technology vs. SK Hynix |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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