Correlation Between Yageo Corp and Info Tek
Can any of the company-specific risk be diversified away by investing in both Yageo Corp and Info Tek 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 Yageo Corp and Info Tek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yageo Corp and Info Tek, you can compare the effects of market volatilities on Yageo Corp and Info Tek 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 Yageo Corp with a short position of Info Tek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yageo Corp and Info Tek.
Diversification Opportunities for Yageo Corp and Info Tek
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yageo and Info is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Yageo Corp and Info Tek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Info Tek and Yageo Corp 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 Yageo Corp are associated (or correlated) with Info Tek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Info Tek has no effect on the direction of Yageo Corp i.e., Yageo Corp and Info Tek go up and down completely randomly.
Pair Corralation between Yageo Corp and Info Tek
Assuming the 90 days trading horizon Yageo Corp is expected to under-perform the Info Tek. But the stock apears to be less risky and, when comparing its historical volatility, Yageo Corp is 1.04 times less risky than Info Tek. The stock trades about -0.02 of its potential returns per unit of risk. The Info Tek is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 3,975 in Info Tek on October 20, 2024 and sell it today you would lose (30.00) from holding Info Tek or give up 0.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yageo Corp vs. Info Tek
Performance |
| Timeline |
| Yageo Corp |
| Info Tek |
Yageo Corp and Info Tek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yageo Corp and Info Tek
The main advantage of trading using opposite Yageo Corp and Info Tek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yageo Corp position performs unexpectedly, Info Tek 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 Info Tek will offset losses from the drop in Info Tek's long position.| Yageo Corp vs. SS Healthcare Holding | Yageo Corp vs. Sports Gear Co | Yageo Corp vs. Feng Ching Metal | Yageo Corp vs. U Ming Marine Transport |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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