Correlation Between Charles Colvard and Yunhong CTI

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

By analyzing existing cross correlation between Charles Colvard and Yunhong CTI, you can compare the effects of market volatilities on Charles Colvard and Yunhong CTI 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 Charles Colvard with a short position of Yunhong CTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charles Colvard and Yunhong CTI.

Diversification Opportunities for Charles Colvard and Yunhong CTI

0.19

Correlation Coefficient

Charles Colvard  Yunhong CTI

Average diversification

The 3 months correlation between Charles and Yunhong is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Charles Colvard and Yunhong CTI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunhong CTI and Charles Colvard 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 Charles Colvard are associated (or correlated) with Yunhong CTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunhong CTI has no effect on the direction of Charles Colvard i.e., Charles Colvard and Yunhong CTI go up and down completely randomly.

Pair Corralation between Charles Colvard and Yunhong CTI

If you would invest  38.00  in Charles Colvard on January 20, 2024 and sell it today you would lose (2.00) from holding Charles Colvard or give up 5.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.81%
Values	Daily Returns

Charles Colvard  vs.  Yunhong CTI

Charles Colvard

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Charles Colvard has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's technical indicators remain relatively invariable which may send shares a bit higher in May 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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.

Pair Trading with Charles Colvard and Yunhong CTI

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

The idea behind Charles Colvard and Yunhong CTI 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.