Correlation Between Gatechain Token and YFII

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

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

Diversification Opportunities for Gatechain Token and YFII

0.96

Correlation Coefficient

Gatechain Token  YFII

Almost no diversification

The 3 months correlation between Gatechain and YFII is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Gatechain Token and YFII in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YFII and Gatechain Token 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 Gatechain Token are associated (or correlated) with YFII. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YFII has no effect on the direction of Gatechain Token i.e., Gatechain Token and YFII go up and down completely randomly.

Pair Corralation between Gatechain Token and YFII

Assuming the 90 days horizon Gatechain Token is expected to generate 0.29 times more return on investment than YFII. However, Gatechain Token is 3.44 times less risky than YFII. It trades about -0.21 of its potential returns per unit of risk. YFII is currently generating about -0.1 per unit of risk. If you would invest  2,354  in Gatechain Token on April 22, 2025 and sell it today you would lose (648.00) from holding Gatechain Token or give up 27.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.48%
Values	Daily Returns

Gatechain Token  vs.  YFII

Gatechain Token

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gatechain Token has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for Gatechain Token shareholders.

YFII

Risk-Adjusted Performance

Very Weak

Over the last 90 days YFII has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for YFII shareholders.

Pair Trading with Gatechain Token and YFII

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

The idea behind Gatechain Token and YFII 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.