Correlation Between Yunhong CTI and Century Communities

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

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

Diversification Opportunities for Yunhong CTI and Century Communities

0.03

Correlation Coefficient

Yunhong CTI  Century Communities

Significant diversification

The 3 months correlation between Yunhong and Century is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Yunhong CTI and Century Communities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Communities 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 Century Communities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Communities has no effect on the direction of Yunhong CTI i.e., Yunhong CTI and Century Communities go up and down completely randomly.

Pair Corralation between Yunhong CTI and Century Communities

If you would invest  243.00  in Yunhong CTI on January 26, 2024 and sell it today you would earn a total of  0.00  from holding Yunhong CTI or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Yunhong CTI  vs.  Century Communities

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.

Century Communities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Century Communities has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Century Communities is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Yunhong CTI and Century Communities

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

The idea behind Yunhong CTI and Century Communities 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.