Correlation Between Dai and YAM

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

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

Diversification Opportunities for Dai and YAM

0.0

Correlation Coefficient

Dai  YAM

Pay attention - limited upside

The 3 months correlation between Dai and YAM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dai and YAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YAM and Dai 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 Dai are associated (or correlated) with YAM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YAM has no effect on the direction of Dai i.e., Dai and YAM go up and down completely randomly.

Pair Corralation between Dai and YAM

If you would invest  100.00  in Dai on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Dai or generate 0.0% return on investment over 90 days.

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

Dai  vs.  YAM

Dai

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dai has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Dai is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

YAM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days YAM has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, YAM is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Dai and YAM

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

The idea behind Dai and YAM 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.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.