Correlation Between Yue Yuen and Crocs
Can any of the company-specific risk be diversified away by investing in both Yue Yuen and Crocs 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 Yue Yuen and Crocs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yue Yuen Industrial and Crocs Inc, you can compare the effects of market volatilities on Yue Yuen and Crocs 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 Yue Yuen with a short position of Crocs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yue Yuen and Crocs.
Diversification Opportunities for Yue Yuen and Crocs
Pay attention - limited upside
The 3 months correlation between Yue and Crocs is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Yue Yuen Industrial and Crocs Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crocs Inc and Yue Yuen 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 Yue Yuen Industrial are associated (or correlated) with Crocs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crocs Inc has no effect on the direction of Yue Yuen i.e., Yue Yuen and Crocs go up and down completely randomly.
Pair Corralation between Yue Yuen and Crocs
Assuming the 90 days horizon Yue Yuen Industrial is expected to generate 1.26 times more return on investment than Crocs. However, Yue Yuen is 1.26 times more volatile than Crocs Inc. It trades about 0.21 of its potential returns per unit of risk. Crocs Inc is currently generating about 0.11 per unit of risk. If you would invest 1,029 in Yue Yuen Industrial on September 4, 2024 and sell it today you would earn a total of 126.00 from holding Yue Yuen Industrial or generate 12.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yue Yuen Industrial vs. Crocs Inc
Performance |
| Timeline |
| Yue Yuen Industrial |
| Crocs Inc |
Yue Yuen and Crocs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yue Yuen and Crocs
The main advantage of trading using opposite Yue Yuen and Crocs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yue Yuen position performs unexpectedly, Crocs 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 Crocs will offset losses from the drop in Crocs' long position.| Yue Yuen vs. ASICS | Yue Yuen vs. American Rebel Holdings | Yue Yuen vs. American Rebel Holdings | Yue Yuen vs. Crocs 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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