Correlation Between Hemogenyx Pharmaceuticals and Yum Brands
Can any of the company-specific risk be diversified away by investing in both Hemogenyx Pharmaceuticals 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 Hemogenyx Pharmaceuticals and Yum Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hemogenyx Pharmaceuticals PLC and Yum Brands, you can compare the effects of market volatilities on Hemogenyx Pharmaceuticals 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 Hemogenyx Pharmaceuticals with a short position of Yum Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hemogenyx Pharmaceuticals and Yum Brands.
Diversification Opportunities for Hemogenyx Pharmaceuticals and Yum Brands
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hemogenyx and Yum is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Hemogenyx Pharmaceuticals PLC and Yum Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yum Brands and Hemogenyx Pharmaceuticals 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 Hemogenyx Pharmaceuticals PLC 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 Hemogenyx Pharmaceuticals i.e., Hemogenyx Pharmaceuticals and Yum Brands go up and down completely randomly.
Pair Corralation between Hemogenyx Pharmaceuticals and Yum Brands
Assuming the 90 days trading horizon Hemogenyx Pharmaceuticals PLC is expected to generate 5.36 times more return on investment than Yum Brands. However, Hemogenyx Pharmaceuticals is 5.36 times more volatile than Yum Brands. It trades about -0.04 of its potential returns per unit of risk. Yum Brands is currently generating about -0.45 per unit of risk. If you would invest 40,960 in Hemogenyx Pharmaceuticals PLC on October 11, 2024 and sell it today you would lose (2,210) from holding Hemogenyx Pharmaceuticals PLC or give up 5.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Hemogenyx Pharmaceuticals PLC vs. Yum Brands
Performance |
| Timeline |
| Hemogenyx Pharmaceuticals |
| Yum Brands |
Hemogenyx Pharmaceuticals and Yum Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hemogenyx Pharmaceuticals and Yum Brands
The main advantage of trading using opposite Hemogenyx Pharmaceuticals and Yum Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hemogenyx Pharmaceuticals 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.| Hemogenyx Pharmaceuticals vs. Elmos Semiconductor SE | Hemogenyx Pharmaceuticals vs. Zoom Video Communications | Hemogenyx Pharmaceuticals vs. Cars Inc | Hemogenyx Pharmaceuticals vs. Cellnex Telecom SA |
| Yum Brands vs. Clean Power Hydrogen | Yum Brands vs. Aeorema Communications Plc | Yum Brands vs. Ryanair Holdings plc | Yum Brands vs. Amedeo Air Four |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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