Correlation Between YY and Gray Television
Can any of the company-specific risk be diversified away by investing in both YY and Gray Television 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 YY and Gray Television into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YY Inc Class and Gray Television, you can compare the effects of market volatilities on YY and Gray Television 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 YY with a short position of Gray Television. Check out your portfolio center. Please also check ongoing floating volatility patterns of YY and Gray Television.
Diversification Opportunities for YY and Gray Television
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between YY and Gray is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding YY Inc Class and Gray Television in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gray Television and YY 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 YY Inc Class are associated (or correlated) with Gray Television. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gray Television has no effect on the direction of YY i.e., YY and Gray Television go up and down completely randomly.
Pair Corralation between YY and Gray Television
Allowing for the 90-day total investment horizon YY Inc Class is expected to generate 0.26 times more return on investment than Gray Television. However, YY Inc Class is 3.78 times less risky than Gray Television. It trades about 0.21 of its potential returns per unit of risk. Gray Television is currently generating about 0.0 per unit of risk. If you would invest 3,382 in YY Inc Class on August 31, 2024 and sell it today you would earn a total of 488.00 from holding YY Inc Class or generate 14.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YY Inc Class vs. Gray Television
Performance |
| Timeline |
| YY Inc Class |
| Gray Television |
YY and Gray Television Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YY and Gray Television
The main advantage of trading using opposite YY and Gray Television positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YY position performs unexpectedly, Gray Television 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 Gray Television will offset losses from the drop in Gray Television's long position.The idea behind YY Inc Class and Gray Television 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.| Gray Television vs. HUMANA INC | Gray Television vs. Aquagold International | Gray Television vs. Barloworld Ltd ADR | Gray Television vs. Thrivent High Yield |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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