Correlation Between Yellow Pages and Stingray
Can any of the company-specific risk be diversified away by investing in both Yellow Pages and Stingray 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 Yellow Pages and Stingray into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yellow Pages Limited and Stingray Group, you can compare the effects of market volatilities on Yellow Pages and Stingray 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 Yellow Pages with a short position of Stingray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yellow Pages and Stingray.
Diversification Opportunities for Yellow Pages and Stingray
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yellow and Stingray is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Yellow Pages Limited and Stingray Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stingray Group and Yellow Pages 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 Yellow Pages Limited are associated (or correlated) with Stingray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stingray Group has no effect on the direction of Yellow Pages i.e., Yellow Pages and Stingray go up and down completely randomly.
Pair Corralation between Yellow Pages and Stingray
Given the investment horizon of 90 days Yellow Pages is expected to generate 91.0 times less return on investment than Stingray. But when comparing it to its historical volatility, Yellow Pages Limited is 1.39 times less risky than Stingray. It trades about 0.0 of its potential returns per unit of risk. Stingray Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 440.00 in Stingray Group on September 24, 2024 and sell it today you would earn a total of 304.00 from holding Stingray Group or generate 69.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yellow Pages Limited vs. Stingray Group
Performance |
| Timeline |
| Yellow Pages Limited |
| Stingray Group |
Yellow Pages and Stingray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yellow Pages and Stingray
The main advantage of trading using opposite Yellow Pages and Stingray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yellow Pages position performs unexpectedly, Stingray 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 Stingray will offset losses from the drop in Stingray's long position.| Yellow Pages vs. Stingray Group | Yellow Pages vs. Richelieu Hardware | Yellow Pages vs. Aimia Inc | Yellow Pages vs. TECSYS Inc |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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