Correlation Between VF and Yangarra Resources
Can any of the company-specific risk be diversified away by investing in both VF and Yangarra Resources 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 VF and Yangarra Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VF Corporation and Yangarra Resources, you can compare the effects of market volatilities on VF and Yangarra Resources 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 VF with a short position of Yangarra Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of VF and Yangarra Resources.
Diversification Opportunities for VF and Yangarra Resources
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between VF and Yangarra is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding VF Corp. and Yangarra Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yangarra Resources and VF 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 VF Corporation are associated (or correlated) with Yangarra Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yangarra Resources has no effect on the direction of VF i.e., VF and Yangarra Resources go up and down completely randomly.
Pair Corralation between VF and Yangarra Resources
Considering the 90-day investment horizon VF Corporation is expected to generate 1.51 times more return on investment than Yangarra Resources. However, VF is 1.51 times more volatile than Yangarra Resources. It trades about 0.02 of its potential returns per unit of risk. Yangarra Resources is currently generating about -0.04 per unit of risk. If you would invest 2,012 in VF Corporation on December 4, 2024 and sell it today you would earn a total of 208.00 from holding VF Corporation or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
VF Corp. vs. Yangarra Resources
Performance |
| Timeline |
| VF Corporation |
| Yangarra Resources |
VF and Yangarra Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VF and Yangarra Resources
The main advantage of trading using opposite VF and Yangarra Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VF position performs unexpectedly, Yangarra Resources 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 Yangarra Resources will offset losses from the drop in Yangarra Resources' long position.The idea behind VF Corporation and Yangarra Resources 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.| Yangarra Resources vs. InPlay Oil Corp | ||
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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