Correlation Between YY and Viacom
Can any of the company-specific risk be diversified away by investing in both YY and Viacom 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 YY and Viacom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YY Inc Class and Viacom Inc, you can compare the effects of market volatilities on YY and Viacom 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 YY with a short position of Viacom. Check out your portfolio center. Please also check ongoing floating volatility patterns of YY and Viacom.
Diversification Opportunities for YY and Viacom
Pay attention - limited upside
The 3 months correlation between YY and Viacom is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding YY Inc Class and Viacom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viacom Inc and YY 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 YY Inc Class are associated (or correlated) with Viacom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viacom Inc has no effect on the direction of YY i.e., YY and Viacom go up and down completely randomly.
Pair Corralation between YY and Viacom
If you would invest 3,189 in YY Inc Class on January 20, 2024 and sell it today you would earn a total of 77.00 from holding YY Inc Class or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
YY Inc Class vs. Viacom Inc
Performance |
| Timeline |
| YY Inc Class |
| Viacom Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
YY and Viacom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YY and Viacom
The main advantage of trading using opposite YY and Viacom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YY position performs unexpectedly, Viacom 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 Viacom will offset losses from the drop in Viacom's long position.The idea behind YY Inc Class and Viacom Inc 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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