Correlation Between Yum Brands and SUPER HI
Can any of the company-specific risk be diversified away by investing in both Yum Brands and SUPER HI 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 SUPER HI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yum Brands and SUPER HI INTERNATIONAL, you can compare the effects of market volatilities on Yum Brands and SUPER HI 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 SUPER HI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yum Brands and SUPER HI.
Diversification Opportunities for Yum Brands and SUPER HI
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yum and SUPER is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Yum Brands and SUPER HI INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUPER HI INTERNATIONAL 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 SUPER HI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUPER HI INTERNATIONAL has no effect on the direction of Yum Brands i.e., Yum Brands and SUPER HI go up and down completely randomly.
Pair Corralation between Yum Brands and SUPER HI
Considering the 90-day investment horizon Yum Brands is expected to generate 13.39 times less return on investment than SUPER HI. But when comparing it to its historical volatility, Yum Brands is 5.9 times less risky than SUPER HI. It trades about 0.18 of its potential returns per unit of risk. SUPER HI INTERNATIONAL is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 1,664 in SUPER HI INTERNATIONAL on September 13, 2024 and sell it today you would earn a total of 921.00 from holding SUPER HI INTERNATIONAL or generate 55.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yum Brands vs. SUPER HI INTERNATIONAL
Performance |
| Timeline |
| Yum Brands |
| SUPER HI INTERNATIONAL |
Yum Brands and SUPER HI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yum Brands and SUPER HI
The main advantage of trading using opposite Yum Brands and SUPER HI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yum Brands position performs unexpectedly, SUPER HI 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 SUPER HI will offset losses from the drop in SUPER HI's long position.The idea behind Yum Brands and SUPER HI INTERNATIONAL 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.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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |