Correlation Between YY and Taboola
Can any of the company-specific risk be diversified away by investing in both YY and Taboola 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 Taboola 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 Taboola Ltd Warrant, you can compare the effects of market volatilities on YY and Taboola 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 Taboola. Check out your portfolio center. Please also check ongoing floating volatility patterns of YY and Taboola.
Diversification Opportunities for YY and Taboola
Very poor diversification
The 3 months correlation between YY and Taboola is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding YY Inc Class and Taboola Ltd Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taboola Warrant 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 Taboola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taboola Warrant has no effect on the direction of YY i.e., YY and Taboola go up and down completely randomly.
Pair Corralation between YY and Taboola
Allowing for the 90-day total investment horizon YY is expected to generate 6.77 times less return on investment than Taboola. But when comparing it to its historical volatility, YY Inc Class is 4.8 times less risky than Taboola. It trades about 0.03 of its potential returns per unit of risk. Taboola Ltd Warrant is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 64.00 in Taboola Ltd Warrant on October 20, 2024 and sell it today you would lose (36.00) from holding Taboola Ltd Warrant or give up 56.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 88.69% |
| Values | Daily Returns |
YY Inc Class vs. Taboola Ltd Warrant
Performance |
| Timeline |
| YY Inc Class |
| Taboola Warrant |
YY and Taboola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YY and Taboola
The main advantage of trading using opposite YY and Taboola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YY position performs unexpectedly, Taboola 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 Taboola will offset losses from the drop in Taboola's long position.| YY vs. Weibo Corp | YY vs. DouYu International Holdings | YY vs. Tencent Music Entertainment | YY vs. Autohome |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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