Correlation Between NYSE Composite and Yum Brands
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Yum Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Yum Brands, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Yum Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Yum Brands.
Diversification Opportunities for NYSE Composite and Yum Brands
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and Yum is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Yum Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yum Brands 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 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 NYSE Composite i.e., NYSE Composite and Yum Brands go up and down completely randomly.
Pair Corralation between NYSE Composite and Yum Brands
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.11 times less return on investment than Yum Brands. But when comparing it to its historical volatility, NYSE Composite is 1.72 times less risky than Yum Brands. It trades about 0.29 of its potential returns per unit of risk. Yum Brands is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 13,339 in Yum Brands on August 31, 2024 and sell it today you would earn a total of 594.00 from holding Yum Brands or generate 4.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Yum Brands
Performance |
| Timeline |
NYSE Composite and Yum Brands Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Yum Brands
Pair trading matchups for Yum Brands
Pair Trading with NYSE Composite and Yum Brands
The main advantage of trading using opposite NYSE Composite and Yum Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Yum Brands vs. Shake Shack | Yum Brands vs. Papa Johns International | Yum Brands vs. Dominos Pizza | Yum Brands vs. Jack In The |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |