Correlation Between Yum Brands and ANDRADA MINING

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

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

Diversification Opportunities for Yum Brands and ANDRADA MINING

0.49

Correlation Coefficient

Yum Brands  ANDRADA MINING

Very weak diversification

The 3 months correlation between Yum and ANDRADA is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Yum Brands and ANDRADA MINING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANDRADA MINING LTD and Yum Brands 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 Yum Brands are associated (or correlated) with ANDRADA MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANDRADA MINING LTD has no effect on the direction of Yum Brands i.e., Yum Brands and ANDRADA MINING go up and down completely randomly.

Pair Corralation between Yum Brands and ANDRADA MINING

Assuming the 90 days horizon Yum Brands is expected to under-perform the ANDRADA MINING. But the stock apears to be less risky and, when comparing its historical volatility, Yum Brands is 3.14 times less risky than ANDRADA MINING. The stock trades about -0.02 of its potential returns per unit of risk. The ANDRADA MINING LTD is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2.85  in ANDRADA MINING LTD on April 25, 2025 and sell it today you would lose (0.10) from holding ANDRADA MINING LTD or give up 3.51% of portfolio value over 90 days.

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

Yum Brands  vs.  ANDRADA MINING LTD

Yum Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yum Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Yum Brands is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

ANDRADA MINING LTD

Risk-Adjusted Performance

Weak

Over the last 90 days ANDRADA MINING LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ANDRADA MINING is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Yum Brands and ANDRADA MINING

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

The idea behind Yum Brands and ANDRADA MINING LTD 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..