Correlation Between NYSE Composite and Yatsen Holding
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Yatsen Holding 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 NYSE Composite and Yatsen Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Yatsen Holding, you can compare the effects of market volatilities on NYSE Composite and Yatsen Holding 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 NYSE Composite with a short position of Yatsen Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Yatsen Holding.
Diversification Opportunities for NYSE Composite and Yatsen Holding
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Yatsen is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Yatsen Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yatsen Holding and NYSE Composite 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 NYSE Composite are associated (or correlated) with Yatsen Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yatsen Holding has no effect on the direction of NYSE Composite i.e., NYSE Composite and Yatsen Holding go up and down completely randomly.
Pair Corralation between NYSE Composite and Yatsen Holding
Assuming the 90 days trading horizon NYSE Composite is expected to generate 7.56 times less return on investment than Yatsen Holding. But when comparing it to its historical volatility, NYSE Composite is 4.56 times less risky than Yatsen Holding. It trades about 0.24 of its potential returns per unit of risk. Yatsen Holding is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 370.00 in Yatsen Holding on August 28, 2024 and sell it today you would earn a total of 104.00 from holding Yatsen Holding or generate 28.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Yatsen Holding
Performance |
| Timeline |
NYSE Composite and Yatsen Holding Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Yatsen Holding
Pair trading matchups for Yatsen Holding
Pair Trading with NYSE Composite and Yatsen Holding
The main advantage of trading using opposite NYSE Composite and Yatsen Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Yatsen Holding 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 Yatsen Holding will offset losses from the drop in Yatsen Holding's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| Yatsen Holding vs. 17 Education Technology | Yatsen Holding vs. Ke Holdings | Yatsen Holding vs. Miniso Group Holding | Yatsen Holding vs. Dada Nexus |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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