Correlation Between Youngy Health and Railway Signal

Can any of the company-specific risk be diversified away by investing in both Youngy Health and Railway Signal 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 Youngy Health and Railway Signal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Youngy Health Co and Railway Signal Communication, you can compare the effects of market volatilities on Youngy Health and Railway Signal 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 Youngy Health with a short position of Railway Signal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngy Health and Railway Signal.

Diversification Opportunities for Youngy Health and Railway Signal

0.2

Correlation Coefficient

Youngy Health  Railway Signal

Modest diversification

The 3 months correlation between Youngy and Railway is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Youngy Health Co and Railway Signal Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Railway Signal Commu and Youngy Health 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 Youngy Health Co are associated (or correlated) with Railway Signal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Railway Signal Commu has no effect on the direction of Youngy Health i.e., Youngy Health and Railway Signal go up and down completely randomly.

Pair Corralation between Youngy Health and Railway Signal

Assuming the 90 days trading horizon Youngy Health Co is expected to generate 2.21 times more return on investment than Railway Signal. However, Youngy Health is 2.21 times more volatile than Railway Signal Communication. It trades about 0.04 of its potential returns per unit of risk. Railway Signal Communication is currently generating about -0.1 per unit of risk. If you would invest  354.00  in Youngy Health Co on October 1, 2024 and sell it today you would earn a total of  20.00  from holding Youngy Health Co or generate 5.65% return on investment over 90 days.

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

Youngy Health Co  vs.  Railway Signal Communication

Youngy Health

Risk-Adjusted Performance

3 of 100

Insignificant

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

Railway Signal Commu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Railway Signal Communication has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Youngy Health and Railway Signal

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

The idea behind Youngy Health Co and Railway Signal Communication 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.