Correlation Between Yum Brands and DATAGROUP
Can any of the company-specific risk be diversified away by investing in both Yum Brands and DATAGROUP 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 Yum Brands and DATAGROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yum Brands and DATAGROUP SE, you can compare the effects of market volatilities on Yum Brands and DATAGROUP 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 Yum Brands with a short position of DATAGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yum Brands and DATAGROUP.
Diversification Opportunities for Yum Brands and DATAGROUP
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yum and DATAGROUP is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Yum Brands and DATAGROUP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATAGROUP SE and Yum Brands 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 Yum Brands are associated (or correlated) with DATAGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATAGROUP SE has no effect on the direction of Yum Brands i.e., Yum Brands and DATAGROUP go up and down completely randomly.
Pair Corralation between Yum Brands and DATAGROUP
Assuming the 90 days horizon Yum Brands is expected to generate 1.04 times less return on investment than DATAGROUP. But when comparing it to its historical volatility, Yum Brands is 2.53 times less risky than DATAGROUP. It trades about 0.32 of its potential returns per unit of risk. DATAGROUP SE is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,200 in DATAGROUP SE on September 2, 2024 and sell it today you would earn a total of 370.00 from holding DATAGROUP SE or generate 8.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yum Brands vs. DATAGROUP SE
Performance |
| Timeline |
| Yum Brands |
| DATAGROUP SE |
Yum Brands and DATAGROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yum Brands and DATAGROUP
The main advantage of trading using opposite Yum Brands and DATAGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yum Brands position performs unexpectedly, DATAGROUP 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 DATAGROUP will offset losses from the drop in DATAGROUP's long position.| Yum Brands vs. Park Hotels Resorts | Yum Brands vs. Wyndham Hotels Resorts | Yum Brands vs. Sunstone Hotel Investors | Yum Brands vs. Choice Hotels International |
| DATAGROUP vs. Superior Plus Corp | DATAGROUP vs. NMI Holdings | DATAGROUP vs. Origin Agritech | DATAGROUP vs. SIVERS SEMICONDUCTORS AB |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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