Correlation Between YX Precious and Systech Bhd

Can any of the company-specific risk be diversified away by investing in both YX Precious and Systech Bhd 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 YX Precious and Systech Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between YX Precious Metals and Systech Bhd, you can compare the effects of market volatilities on YX Precious and Systech Bhd 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 YX Precious with a short position of Systech Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of YX Precious and Systech Bhd.

Diversification Opportunities for YX Precious and Systech Bhd

0.01

Correlation Coefficient

YX Precious  Systech Bhd

Significant diversification

The 3 months correlation between 0250 and Systech is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding YX Precious Metals and Systech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systech Bhd and YX Precious 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 YX Precious Metals are associated (or correlated) with Systech Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Systech Bhd has no effect on the direction of YX Precious i.e., YX Precious and Systech Bhd go up and down completely randomly.

Pair Corralation between YX Precious and Systech Bhd

Assuming the 90 days trading horizon YX Precious Metals is expected to under-perform the Systech Bhd. But the stock apears to be less risky and, when comparing its historical volatility, YX Precious Metals is 1.51 times less risky than Systech Bhd. The stock trades about -0.11 of its potential returns per unit of risk. The Systech Bhd is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  30.00  in Systech Bhd on September 26, 2024 and sell it today you would earn a total of  2.00  from holding Systech Bhd or generate 6.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

YX Precious Metals  vs.  Systech Bhd

YX Precious Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days YX Precious Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Systech Bhd

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Systech Bhd are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Systech Bhd may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with YX Precious and Systech Bhd

The main advantage of trading using opposite YX Precious and Systech Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YX Precious position performs unexpectedly, Systech Bhd 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 Systech Bhd will offset losses from the drop in Systech Bhd's long position.

The idea behind YX Precious Metals and Systech Bhd 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.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.