Correlation Between Yield Guild and UPP

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

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

Diversification Opportunities for Yield Guild and UPP

0.76

Correlation Coefficient

Yield Guild  UPP

Poor diversification

The 3 months correlation between Yield and UPP is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Yield Guild Games and UPP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UPP and Yield Guild 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 Yield Guild Games are associated (or correlated) with UPP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UPP has no effect on the direction of Yield Guild i.e., Yield Guild and UPP go up and down completely randomly.

Pair Corralation between Yield Guild and UPP

Assuming the 90 days trading horizon Yield Guild Games is expected to generate 1.49 times more return on investment than UPP. However, Yield Guild is 1.49 times more volatile than UPP. It trades about -0.06 of its potential returns per unit of risk. UPP is currently generating about -0.14 per unit of risk. If you would invest  120.00  in Yield Guild Games on January 26, 2024 and sell it today you would lose (25.00) from holding Yield Guild Games or give up 20.83% of portfolio value over 90 days.

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

Yield Guild Games  vs.  UPP

Yield Guild Games

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Yield Guild Games are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Yield Guild exhibited solid returns over the last few months and may actually be approaching a breakup point.

UPP

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in UPP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, UPP exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yield Guild and UPP

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

The idea behind Yield Guild Games and UPP 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.