Correlation Between Yatsen Holding and Waldencast Acquisition
Can any of the company-specific risk be diversified away by investing in both Yatsen Holding and Waldencast Acquisition 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 Yatsen Holding and Waldencast Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yatsen Holding and Waldencast Acquisition Corp, you can compare the effects of market volatilities on Yatsen Holding and Waldencast Acquisition 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 Yatsen Holding with a short position of Waldencast Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yatsen Holding and Waldencast Acquisition.
Diversification Opportunities for Yatsen Holding and Waldencast Acquisition
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yatsen and Waldencast is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Yatsen Holding and Waldencast Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waldencast Acquisition and Yatsen Holding 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 Yatsen Holding are associated (or correlated) with Waldencast Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waldencast Acquisition has no effect on the direction of Yatsen Holding i.e., Yatsen Holding and Waldencast Acquisition go up and down completely randomly.
Pair Corralation between Yatsen Holding and Waldencast Acquisition
Considering the 90-day investment horizon Yatsen Holding is expected to generate 6.64 times less return on investment than Waldencast Acquisition. But when comparing it to its historical volatility, Yatsen Holding is 2.68 times less risky than Waldencast Acquisition. It trades about 0.01 of its potential returns per unit of risk. Waldencast Acquisition Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 79.00 in Waldencast Acquisition Corp on August 27, 2024 and sell it today you would lose (65.00) from holding Waldencast Acquisition Corp or give up 82.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yatsen Holding vs. Waldencast Acquisition Corp
Performance |
| Timeline |
| Yatsen Holding |
| Waldencast Acquisition |
Yatsen Holding and Waldencast Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yatsen Holding and Waldencast Acquisition
The main advantage of trading using opposite Yatsen Holding and Waldencast Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yatsen Holding position performs unexpectedly, Waldencast Acquisition 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 Waldencast Acquisition will offset losses from the drop in Waldencast Acquisition's long position.| Yatsen Holding vs. 17 Education Technology | Yatsen Holding vs. Ke Holdings | Yatsen Holding vs. Miniso Group Holding | Yatsen Holding vs. Dada Nexus |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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