Correlation Between DIA and Yield Guild

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

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

Diversification Opportunities for DIA and Yield Guild

0.53

Correlation Coefficient

DIA  Yield Guild

Very weak diversification

The 3 months correlation between DIA and Yield is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding DIA and Yield Guild Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yield Guild Games and DIA 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 DIA are associated (or correlated) with Yield Guild. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yield Guild Games has no effect on the direction of DIA i.e., DIA and Yield Guild go up and down completely randomly.

Pair Corralation between DIA and Yield Guild

Assuming the 90 days trading horizon DIA is expected to generate 1.0 times more return on investment than Yield Guild. However, DIA is 1.0 times more volatile than Yield Guild Games. It trades about 0.07 of its potential returns per unit of risk. Yield Guild Games is currently generating about 0.03 per unit of risk. If you would invest  24.00  in DIA on April 24, 2025 and sell it today you would earn a total of  83.00  from holding DIA or generate 345.83% return on investment over 90 days.

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

DIA  vs.  Yield Guild Games

DIA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DIA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, DIA exhibited solid returns over the last few months and may actually be approaching a breakup point.

Yield Guild Games

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Yield Guild Games are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Yield Guild may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with DIA and Yield Guild

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

The idea behind DIA and Yield Guild Games 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.