Correlation Between YHN Acquisition and SBC Medical

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

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

Diversification Opportunities for YHN Acquisition and SBC Medical

0.0

Correlation Coefficient

YHN Acquisition  SBC Medical

Pay attention - limited upside

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

Pair Corralation between YHN Acquisition and SBC Medical

Assuming the 90 days horizon YHN Acquisition I is expected to generate 21.07 times more return on investment than SBC Medical. However, YHN Acquisition is 21.07 times more volatile than SBC Medical Group. It trades about 0.3 of its potential returns per unit of risk. SBC Medical Group is currently generating about 0.27 per unit of risk. If you would invest  0.00  in YHN Acquisition I on September 3, 2024 and sell it today you would earn a total of  11.00  from holding YHN Acquisition I or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	20.37%
Values	Daily Returns

YHN Acquisition I  vs.  SBC Medical Group

YHN Acquisition I

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in YHN Acquisition I are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, YHN Acquisition reported solid returns over the last few months and may actually be approaching a breakup point.

SBC Medical Group

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SBC Medical Group are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, SBC Medical showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with YHN Acquisition and SBC Medical

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

The idea behind YHN Acquisition I and SBC Medical Group 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.