Correlation Between Skycity Entertainment and Deep Yellow

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

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

Diversification Opportunities for Skycity Entertainment and Deep Yellow

-0.71

Correlation Coefficient

Skycity Entertainment  Deep Yellow

Pay attention - limited upside

The 3 months correlation between Skycity and Deep is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Skycity Entertainment Group and Deep Yellow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deep Yellow and Skycity Entertainment 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 Skycity Entertainment Group are associated (or correlated) with Deep Yellow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deep Yellow has no effect on the direction of Skycity Entertainment i.e., Skycity Entertainment and Deep Yellow go up and down completely randomly.

Pair Corralation between Skycity Entertainment and Deep Yellow

Assuming the 90 days trading horizon Skycity Entertainment Group is expected to under-perform the Deep Yellow. But the stock apears to be less risky and, when comparing its historical volatility, Skycity Entertainment Group is 1.94 times less risky than Deep Yellow. The stock trades about -0.08 of its potential returns per unit of risk. The Deep Yellow is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  102.00  in Deep Yellow on April 25, 2025 and sell it today you would earn a total of  78.00  from holding Deep Yellow or generate 76.47% return on investment over 90 days.

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

Skycity Entertainment Group  vs.  Deep Yellow

Skycity Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Skycity Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Deep Yellow

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Deep Yellow are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Deep Yellow unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Skycity Entertainment and Deep Yellow

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

The idea behind Skycity Entertainment Group and Deep Yellow 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.