Correlation Between Yum Brands and High Roller
Can any of the company-specific risk be diversified away by investing in both Yum Brands and High Roller 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 High Roller into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yum Brands and High Roller Technologies,, you can compare the effects of market volatilities on Yum Brands and High Roller 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 High Roller. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yum Brands and High Roller.
Diversification Opportunities for Yum Brands and High Roller
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yum and High is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Yum Brands and High Roller Technologies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Roller Technologies, 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 High Roller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Roller Technologies, has no effect on the direction of Yum Brands i.e., Yum Brands and High Roller go up and down completely randomly.
Pair Corralation between Yum Brands and High Roller
Considering the 90-day investment horizon Yum Brands is expected to generate 0.14 times more return on investment than High Roller. However, Yum Brands is 7.07 times less risky than High Roller. It trades about 0.07 of its potential returns per unit of risk. High Roller Technologies, is currently generating about -0.01 per unit of risk. If you would invest 13,277 in Yum Brands on September 12, 2024 and sell it today you would earn a total of 574.00 from holding Yum Brands or generate 4.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 54.69% |
| Values | Daily Returns |
Yum Brands vs. High Roller Technologies,
Performance |
| Timeline |
| Yum Brands |
| High Roller Technologies, |
Yum Brands and High Roller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yum Brands and High Roller
The main advantage of trading using opposite Yum Brands and High Roller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yum Brands position performs unexpectedly, High Roller 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 High Roller will offset losses from the drop in High Roller's long position.| Yum Brands vs. Nathans Famous | Yum Brands vs. Flanigans Enterprises | Yum Brands vs. Good Times Restaurants | Yum Brands vs. Auburn National Bancorporation |
| High Roller vs. Corporacion America Airports | High Roller vs. GE Vernova LLC | High Roller vs. Atmos Energy | High Roller vs. Porvair plc |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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