Correlation Between YAOKO CO and Woolworths Group
Can any of the company-specific risk be diversified away by investing in both YAOKO CO and Woolworths Group 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 YAOKO CO and Woolworths Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YAOKO LTD and Woolworths Group Limited, you can compare the effects of market volatilities on YAOKO CO and Woolworths Group 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 YAOKO CO with a short position of Woolworths Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of YAOKO CO and Woolworths Group.
Diversification Opportunities for YAOKO CO and Woolworths Group
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between YAOKO and Woolworths is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding YAOKO LTD and Woolworths Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woolworths Group and YAOKO CO 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 YAOKO LTD are associated (or correlated) with Woolworths Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woolworths Group has no effect on the direction of YAOKO CO i.e., YAOKO CO and Woolworths Group go up and down completely randomly.
Pair Corralation between YAOKO CO and Woolworths Group
Assuming the 90 days horizon YAOKO LTD is expected to generate 1.82 times more return on investment than Woolworths Group. However, YAOKO CO is 1.82 times more volatile than Woolworths Group Limited. It trades about 0.01 of its potential returns per unit of risk. Woolworths Group Limited is currently generating about -0.08 per unit of risk. If you would invest 5,500 in YAOKO LTD on October 21, 2024 and sell it today you would earn a total of 0.00 from holding YAOKO LTD or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
YAOKO LTD vs. Woolworths Group Limited
Performance |
| Timeline |
| YAOKO LTD |
| Woolworths Group |
YAOKO CO and Woolworths Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YAOKO CO and Woolworths Group
The main advantage of trading using opposite YAOKO CO and Woolworths Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YAOKO CO position performs unexpectedly, Woolworths Group 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 Woolworths Group will offset losses from the drop in Woolworths Group's long position.| YAOKO CO vs. Synovus Financial Corp | YAOKO CO vs. ADRIATIC METALS LS 013355 | YAOKO CO vs. UNIQA INSURANCE GR | YAOKO CO vs. Forsys Metals Corp |
| Woolworths Group vs. Seven i Holdings | Woolworths Group vs. Koninklijke Ahold Delhaize | Woolworths Group vs. Koninklijke Ahold Delhaize | Woolworths Group vs. AHOLD DELHAIADR16 EO 25 |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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