Correlation Between Yung Zip and Advanced Ceramic

Can any of the company-specific risk be diversified away by investing in both Yung Zip and Advanced Ceramic 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 Yung Zip and Advanced Ceramic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yung Zip Chemical and Advanced Ceramic X, you can compare the effects of market volatilities on Yung Zip and Advanced Ceramic 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 Yung Zip with a short position of Advanced Ceramic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yung Zip and Advanced Ceramic.

Diversification Opportunities for Yung Zip and Advanced Ceramic

0.25

Correlation Coefficient

Yung Zip  Advanced Ceramic

Modest diversification

The 3 months correlation between Yung and Advanced is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Yung Zip Chemical and Advanced Ceramic X in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Ceramic X and Yung Zip 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 Yung Zip Chemical are associated (or correlated) with Advanced Ceramic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Ceramic X has no effect on the direction of Yung Zip i.e., Yung Zip and Advanced Ceramic go up and down completely randomly.

Pair Corralation between Yung Zip and Advanced Ceramic

Assuming the 90 days trading horizon Yung Zip Chemical is expected to generate 0.92 times more return on investment than Advanced Ceramic. However, Yung Zip Chemical is 1.09 times less risky than Advanced Ceramic. It trades about 0.01 of its potential returns per unit of risk. Advanced Ceramic X is currently generating about 0.01 per unit of risk. If you would invest  3,092  in Yung Zip Chemical on September 12, 2024 and sell it today you would earn a total of  53.00  from holding Yung Zip Chemical or generate 1.71% return on investment over 90 days.

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

Yung Zip Chemical  vs.  Advanced Ceramic X

Yung Zip Chemical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yung Zip Chemical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Advanced Ceramic X

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Ceramic X are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Advanced Ceramic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Yung Zip and Advanced Ceramic

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

The idea behind Yung Zip Chemical and Advanced Ceramic X 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.