Correlation Between Yunhong CTI and FullNet Communications
Can any of the company-specific risk be diversified away by investing in both Yunhong CTI and FullNet Communications 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 Yunhong CTI and FullNet Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yunhong CTI and FullNet Communications, you can compare the effects of market volatilities on Yunhong CTI and FullNet Communications 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 Yunhong CTI with a short position of FullNet Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunhong CTI and FullNet Communications.
Diversification Opportunities for Yunhong CTI and FullNet Communications
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yunhong and FullNet is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Yunhong CTI and FullNet Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FullNet Communications and Yunhong CTI 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 Yunhong CTI are associated (or correlated) with FullNet Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FullNet Communications has no effect on the direction of Yunhong CTI i.e., Yunhong CTI and FullNet Communications go up and down completely randomly.
Pair Corralation between Yunhong CTI and FullNet Communications
Given the investment horizon of 90 days Yunhong CTI is expected to generate 2.79 times less return on investment than FullNet Communications. But when comparing it to its historical volatility, Yunhong CTI is 2.89 times less risky than FullNet Communications. It trades about 0.09 of its potential returns per unit of risk. FullNet Communications is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 28.00 in FullNet Communications on January 25, 2024 and sell it today you would lose (3.00) from holding FullNet Communications or give up 10.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 64.58% |
| Values | Daily Returns |
Yunhong CTI vs. FullNet Communications
Performance |
| Timeline |
| Yunhong CTI |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| FullNet Communications |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Yunhong CTI and FullNet Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yunhong CTI and FullNet Communications
The main advantage of trading using opposite Yunhong CTI and FullNet Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunhong CTI position performs unexpectedly, FullNet Communications 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 FullNet Communications will offset losses from the drop in FullNet Communications' long position.| Yunhong CTI vs. Card Factory plc | Yunhong CTI vs. School Specialty | Yunhong CTI vs. Ceconomy AG ADR | Yunhong CTI vs. Bowlin Travel Centers |
| FullNet Communications vs. ATT Inc | FullNet Communications vs. Tele2 AB | FullNet Communications vs. Proximus NV ADR | FullNet Communications vs. Telstra Limited |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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