Correlation Between Yunhong CTI and Card Factory

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

By analyzing existing cross correlation between Yunhong CTI and Card Factory plc, you can compare the effects of market volatilities on Yunhong CTI and Card Factory 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 Card Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunhong CTI and Card Factory.

Diversification Opportunities for Yunhong CTI and Card Factory

-0.22

Correlation Coefficient

Yunhong CTI  Card Factory

Very good diversification

The 3 months correlation between Yunhong and Card is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Yunhong CTI and Card Factory plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Card Factory plc 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 Card Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Card Factory plc has no effect on the direction of Yunhong CTI i.e., Yunhong CTI and Card Factory go up and down completely randomly.

Pair Corralation between Yunhong CTI and Card Factory

If you would invest  121.00  in Card Factory plc on January 30, 2024 and sell it today you would earn a total of  5.00  from holding Card Factory plc or generate 4.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Yunhong CTI  vs.  Card Factory plc

Yunhong CTI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yunhong CTI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Yunhong CTI is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Card Factory plc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Card Factory plc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Card Factory reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yunhong CTI and Card Factory

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

The idea behind Yunhong CTI and Card Factory plc 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.