Correlation Between Yum Brands and ZipLink
Can any of the company-specific risk be diversified away by investing in both Yum Brands and ZipLink 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 ZipLink into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yum Brands and ZipLink, you can compare the effects of market volatilities on Yum Brands and ZipLink 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 ZipLink. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yum Brands and ZipLink.
Diversification Opportunities for Yum Brands and ZipLink
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yum and ZipLink is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Yum Brands and ZipLink in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZipLink 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 ZipLink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZipLink has no effect on the direction of Yum Brands i.e., Yum Brands and ZipLink go up and down completely randomly.
Pair Corralation between Yum Brands and ZipLink
If you would invest 12,523 in Yum Brands on September 3, 2024 and sell it today you would earn a total of 1,380 from holding Yum Brands or generate 11.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.08% |
| Values | Daily Returns |
Yum Brands vs. ZipLink
Performance |
| Timeline |
| Yum Brands |
| ZipLink |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Yum Brands and ZipLink Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yum Brands and ZipLink
The main advantage of trading using opposite Yum Brands and ZipLink positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yum Brands position performs unexpectedly, ZipLink 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 ZipLink will offset losses from the drop in ZipLink's long position.| Yum Brands vs. Highway Holdings Limited | Yum Brands vs. QCR Holdings | Yum Brands vs. Partner Communications | Yum Brands vs. Acumen Pharmaceuticals |
| ZipLink vs. Franklin Credit Management | ZipLink vs. Jacobs Solutions | ZipLink vs. Ameriprise Financial | ZipLink vs. Griffon |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |