Correlation Between Yuma Energy and BBQ Holdings

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

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

Diversification Opportunities for Yuma Energy and BBQ Holdings

1.0

Correlation Coefficient

Yuma Energy  BBQ Holdings

No risk reduction

The 3 months correlation between Yuma and BBQ is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Yuma Energy and BBQ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBQ Holdings and Yuma Energy 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 Yuma Energy are associated (or correlated) with BBQ Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBQ Holdings has no effect on the direction of Yuma Energy i.e., Yuma Energy and BBQ Holdings go up and down completely randomly.

Pair Corralation between Yuma Energy and BBQ Holdings

If you would invest  1,724  in BBQ Holdings on February 21, 2024 and sell it today you would earn a total of  0.00  from holding BBQ Holdings or generate 0.0% return on investment over 90 days.

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

Yuma Energy  vs.  BBQ Holdings

Yuma Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yuma Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Yuma Energy is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

BBQ Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BBQ Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, BBQ Holdings is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Yuma Energy and BBQ Holdings

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

The idea behind Yuma Energy and BBQ Holdings 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.