Correlation Between Mulberry Group and Yum Brands
Can any of the company-specific risk be diversified away by investing in both Mulberry Group 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 Mulberry Group and Yum Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mulberry Group PLC and Yum Brands, you can compare the effects of market volatilities on Mulberry Group 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 Mulberry Group with a short position of Yum Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mulberry Group and Yum Brands.
Diversification Opportunities for Mulberry Group and Yum Brands
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mulberry and Yum is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Mulberry Group PLC and Yum Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yum Brands and Mulberry Group 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 Mulberry Group 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 Mulberry Group i.e., Mulberry Group and Yum Brands go up and down completely randomly.
Pair Corralation between Mulberry Group and Yum Brands
Assuming the 90 days trading horizon Mulberry Group PLC is expected to under-perform the Yum Brands. But the stock apears to be less risky and, when comparing its historical volatility, Mulberry Group PLC is 1.2 times less risky than Yum Brands. The stock trades about -0.03 of its potential returns per unit of risk. The Yum Brands is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 12,237 in Yum Brands on September 23, 2024 and sell it today you would earn a total of 918.00 from holding Yum Brands or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Mulberry Group PLC vs. Yum Brands
Performance |
| Timeline |
| Mulberry Group PLC |
| Yum Brands |
Mulberry Group and Yum Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mulberry Group and Yum Brands
The main advantage of trading using opposite Mulberry Group and Yum Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mulberry Group 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.| Mulberry Group vs. Rockfire Resources plc | Mulberry Group vs. Tlou Energy | Mulberry Group vs. Ikigai Ventures | Mulberry Group vs. Falcon Oil Gas |
| Yum Brands vs. Uniper SE | Yum Brands vs. Mulberry Group PLC | Yum Brands vs. London Security Plc | Yum Brands vs. Triad Group PLC |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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