Correlation Between TECSYS and Yangarra Resources

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

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

Diversification Opportunities for TECSYS and Yangarra Resources

-0.61

Correlation Coefficient

TECSYS  Yangarra Resources

Excellent diversification

The 3 months correlation between TECSYS and Yangarra is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding TECSYS Inc and Yangarra Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yangarra Resources and TECSYS 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 TECSYS Inc are associated (or correlated) with Yangarra Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yangarra Resources has no effect on the direction of TECSYS i.e., TECSYS and Yangarra Resources go up and down completely randomly.

Pair Corralation between TECSYS and Yangarra Resources

Assuming the 90 days trading horizon TECSYS Inc is expected to generate 0.71 times more return on investment than Yangarra Resources. However, TECSYS Inc is 1.41 times less risky than Yangarra Resources. It trades about 0.1 of its potential returns per unit of risk. Yangarra Resources is currently generating about -0.09 per unit of risk. If you would invest  4,178  in TECSYS Inc on September 22, 2024 and sell it today you would earn a total of  417.00  from holding TECSYS Inc or generate 9.98% return on investment over 90 days.

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

TECSYS Inc  vs.  Yangarra Resources

TECSYS Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TECSYS Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, TECSYS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Yangarra Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yangarra Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with TECSYS and Yangarra Resources

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

The idea behind TECSYS Inc and Yangarra Resources 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.