Correlation Between Citizens and Yum Brands
Can any of the company-specific risk be diversified away by investing in both Citizens 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 Citizens and Yum Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens and Yum Brands, you can compare the effects of market volatilities on Citizens 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 Citizens with a short position of Yum Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens and Yum Brands.
Diversification Opportunities for Citizens and Yum Brands
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citizens and Yum is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Citizens and Yum Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yum Brands and Citizens 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 Citizens 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 Citizens i.e., Citizens and Yum Brands go up and down completely randomly.
Pair Corralation between Citizens and Yum Brands
Considering the 90-day investment horizon Citizens is expected to generate 4.24 times more return on investment than Yum Brands. However, Citizens is 4.24 times more volatile than Yum Brands. It trades about 0.13 of its potential returns per unit of risk. Yum Brands is currently generating about 0.03 per unit of risk. If you would invest 231.00 in Citizens on September 3, 2024 and sell it today you would earn a total of 217.00 from holding Citizens or generate 93.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens vs. Yum Brands
Performance |
| Timeline |
| Citizens |
| Yum Brands |
Citizens and Yum Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens and Yum Brands
The main advantage of trading using opposite Citizens and Yum Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens 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.| Citizens vs. CNO Financial Group | Citizens vs. Brighthouse Financial | Citizens vs. FG Annuities Life | Citizens vs. Prudential Public Limited |
| Yum Brands vs. Highway Holdings Limited | Yum Brands vs. QCR Holdings | Yum Brands vs. Partner Communications | Yum Brands vs. Acumen Pharmaceuticals |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |