Correlation Between Super League and YY

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Can any of the company-specific risk be diversified away by investing in both Super League and YY 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 Super League and YY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Super League Enterprise and YY Inc Class, you can compare the effects of market volatilities on Super League and YY 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 Super League with a short position of YY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super League and YY.

Diversification Opportunities for Super League and YY

-0.57
  Correlation Coefficient
 YY

Excellent diversification

The 3 months correlation between Super and YY is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Super League Enterprise and YY Inc Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YY Inc Class and Super League 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 Super League Enterprise are associated (or correlated) with YY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YY Inc Class has no effect on the direction of Super League i.e., Super League and YY go up and down completely randomly.

Pair Corralation between Super League and YY

Considering the 90-day investment horizon Super League Enterprise is expected to under-perform the YY. In addition to that, Super League is 2.4 times more volatile than YY Inc Class. It trades about -0.35 of its total potential returns per unit of risk. YY Inc Class is currently generating about 0.18 per unit of volatility. If you would invest  3,458  in YY Inc Class on August 30, 2024 and sell it today you would earn a total of  412.00  from holding YY Inc Class or generate 11.91% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.65%
ValuesDaily Returns

Super League Enterprise  vs.  YY Inc Class

 Performance 
       Timeline  
Super League Enterprise 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Super League Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
YY Inc Class 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in YY Inc Class are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, YY showed solid returns over the last few months and may actually be approaching a breakup point.

Super League and YY Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Super League and YY

The main advantage of trading using opposite Super League and YY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super League position performs unexpectedly, YY 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 YY will offset losses from the drop in YY's long position.
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The idea behind Super League Enterprise and YY Inc Class pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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