Correlation Between Yggdrazil Group and RS Public

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

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

Diversification Opportunities for Yggdrazil Group and RS Public

0.31

Correlation Coefficient

Yggdrazil Group  RS Public

Weak diversification

The 3 months correlation between Yggdrazil and RS-R is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Yggdrazil Group Public and RS Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RS Public and Yggdrazil Group 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 Yggdrazil Group Public are associated (or correlated) with RS Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RS Public has no effect on the direction of Yggdrazil Group i.e., Yggdrazil Group and RS Public go up and down completely randomly.

Pair Corralation between Yggdrazil Group and RS Public

Assuming the 90 days trading horizon Yggdrazil Group Public is expected to under-perform the RS Public. But the stock apears to be less risky and, when comparing its historical volatility, Yggdrazil Group Public is 25.8 times less risky than RS Public. The stock trades about -0.1 of its potential returns per unit of risk. The RS Public is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  720.00  in RS Public on September 12, 2024 and sell it today you would lose (135.00) from holding RS Public or give up 18.75% of portfolio value over 90 days.

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

Yggdrazil Group Public  vs.  RS Public

Yggdrazil Group Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yggdrazil Group Public 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 technical and fundamental 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.

RS Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in RS Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, RS Public disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yggdrazil Group and RS Public

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

The idea behind Yggdrazil Group Public and RS Public 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.