Correlation Between Catcher Technology and Yem Chio

Can any of the company-specific risk be diversified away by investing in both Catcher Technology and Yem Chio 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 Catcher Technology and Yem Chio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Catcher Technology Co and Yem Chio Co, you can compare the effects of market volatilities on Catcher Technology and Yem Chio 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 Catcher Technology with a short position of Yem Chio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catcher Technology and Yem Chio.

Diversification Opportunities for Catcher Technology and Yem Chio

0.47

Correlation Coefficient

Catcher Technology  Yem Chio

Very weak diversification

The 3 months correlation between Catcher and Yem is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Catcher Technology Co and Yem Chio Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yem Chio and Catcher Technology 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 Catcher Technology Co are associated (or correlated) with Yem Chio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yem Chio has no effect on the direction of Catcher Technology i.e., Catcher Technology and Yem Chio go up and down completely randomly.

Pair Corralation between Catcher Technology and Yem Chio

Assuming the 90 days trading horizon Catcher Technology is expected to generate 1.42 times less return on investment than Yem Chio. But when comparing it to its historical volatility, Catcher Technology Co is 1.16 times less risky than Yem Chio. It trades about 0.07 of its potential returns per unit of risk. Yem Chio Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,595  in Yem Chio Co on March 17, 2024 and sell it today you would earn a total of  505.00  from holding Yem Chio Co or generate 31.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Catcher Technology Co  vs.  Yem Chio Co

Catcher Technology

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Catcher Technology Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Catcher Technology may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Yem Chio

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Yem Chio Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Yem Chio showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Catcher Technology and Yem Chio

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

The idea behind Catcher Technology Co and Yem Chio Co 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.