Correlation Between Yue Yuen and Cytokinetics

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Can any of the company-specific risk be diversified away by investing in both Yue Yuen and Cytokinetics 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 Yue Yuen and Cytokinetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yue Yuen Industrial and Cytokinetics, you can compare the effects of market volatilities on Yue Yuen and Cytokinetics 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 Yue Yuen with a short position of Cytokinetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yue Yuen and Cytokinetics.

Diversification Opportunities for Yue Yuen and Cytokinetics

0.66
  Correlation Coefficient

Poor diversification

The 3 months correlation between YUEIY and Cytokinetics is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Yue Yuen Industrial and Cytokinetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytokinetics and Yue Yuen 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 Yue Yuen Industrial are associated (or correlated) with Cytokinetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytokinetics has no effect on the direction of Yue Yuen i.e., Yue Yuen and Cytokinetics go up and down completely randomly.

Pair Corralation between Yue Yuen and Cytokinetics

Assuming the 90 days horizon Yue Yuen Industrial is expected to generate 1.35 times more return on investment than Cytokinetics. However, Yue Yuen is 1.35 times more volatile than Cytokinetics. It trades about 0.2 of its potential returns per unit of risk. Cytokinetics is currently generating about -0.03 per unit of risk. If you would invest  537.00  in Yue Yuen Industrial on September 3, 2022 and sell it today you would earn a total of  100.00  from holding Yue Yuen Industrial or generate 18.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Yue Yuen Industrial  vs.  Cytokinetics

 Performance (%) 
       Timeline  
Yue Yuen Industrial 
YUEIY Performance
0 of 100
Over the last 90 days Yue Yuen Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Yue Yuen is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

YUEIY Price Channel

Cytokinetics 
Cytokinetics Performance
0 of 100
Over the last 90 days Cytokinetics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2023. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Cytokinetics Price Channel

Yue Yuen and Cytokinetics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Yue Yuen and Cytokinetics

The main advantage of trading using opposite Yue Yuen and Cytokinetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yue Yuen position performs unexpectedly, Cytokinetics 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 Cytokinetics will offset losses from the drop in Cytokinetics' long position.
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The idea behind Yue Yuen Industrial and Cytokinetics 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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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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