Correlation Between AfriTin Mining and Yum Brands
Can any of the company-specific risk be diversified away by investing in both AfriTin Mining and Yum Brands 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 AfriTin Mining and Yum Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AfriTin Mining and Yum Brands, you can compare the effects of market volatilities on AfriTin Mining and Yum Brands 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 AfriTin Mining with a short position of Yum Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of AfriTin Mining and Yum Brands.
Diversification Opportunities for AfriTin Mining and Yum Brands
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AfriTin and Yum is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding AfriTin Mining and Yum Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yum Brands and AfriTin Mining 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 AfriTin Mining are associated (or correlated) with Yum Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yum Brands has no effect on the direction of AfriTin Mining i.e., AfriTin Mining and Yum Brands go up and down completely randomly.
Pair Corralation between AfriTin Mining and Yum Brands
Assuming the 90 days trading horizon AfriTin Mining is expected to under-perform the Yum Brands. In addition to that, AfriTin Mining is 2.98 times more volatile than Yum Brands. It trades about -0.07 of its total potential returns per unit of risk. Yum Brands is currently generating about -0.01 per unit of volatility. If you would invest 12,910 in Yum Brands on October 26, 2024 and sell it today you would lose (208.00) from holding Yum Brands or give up 1.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.43% |
| Values | Daily Returns |
AfriTin Mining vs. Yum Brands
Performance |
| Timeline |
| AfriTin Mining |
| Yum Brands |
AfriTin Mining and Yum Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AfriTin Mining and Yum Brands
The main advantage of trading using opposite AfriTin Mining and Yum Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AfriTin Mining position performs unexpectedly, Yum Brands 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 Yum Brands will offset losses from the drop in Yum Brands' long position.| AfriTin Mining vs. Concurrent Technologies Plc | AfriTin Mining vs. JPMorgan Japanese Investment | AfriTin Mining vs. Edinburgh Investment Trust | AfriTin Mining vs. SMA Solar Technology |
| Yum Brands vs. Empire Metals Limited | Yum Brands vs. Eastinco Mining Exploration | Yum Brands vs. AfriTin Mining | Yum Brands vs. Coeur Mining |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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