Correlation Between So Young and Spok Holdings

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

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

Diversification Opportunities for So Young and Spok Holdings

-0.66

Correlation Coefficient

So Young  Spok Holdings

Excellent diversification

The 3 months correlation between So Young and Spok is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding So Young International and Spok Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spok Holdings and So Young 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 So Young International are associated (or correlated) with Spok Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spok Holdings has no effect on the direction of So Young i.e., So Young and Spok Holdings go up and down completely randomly.

Pair Corralation between So Young and Spok Holdings

Allowing for the 90-day total investment horizon So Young International is expected to generate 2.02 times more return on investment than Spok Holdings. However, So Young is 2.02 times more volatile than Spok Holdings. It trades about 0.18 of its potential returns per unit of risk. Spok Holdings is currently generating about -0.19 per unit of risk. If you would invest  111.00  in So Young International on February 7, 2024 and sell it today you would earn a total of  18.00  from holding So Young International or generate 16.22% return on investment over 90 days.

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

So Young International  vs.  Spok Holdings

So Young International

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in So Young International are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, So Young showed solid returns over the last few months and may actually be approaching a breakup point.

Spok Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spok Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with So Young and Spok Holdings

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

The idea behind So Young International and Spok 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.