Correlation Between Aumann AG and Yokogawa Electric
Can any of the company-specific risk be diversified away by investing in both Aumann AG and Yokogawa Electric 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 Aumann AG and Yokogawa Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aumann AG and Yokogawa Electric Corp, you can compare the effects of market volatilities on Aumann AG and Yokogawa Electric 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 Aumann AG with a short position of Yokogawa Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aumann AG and Yokogawa Electric.
Diversification Opportunities for Aumann AG and Yokogawa Electric
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aumann and Yokogawa is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Aumann AG and Yokogawa Electric Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yokogawa Electric Corp and Aumann AG 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 Aumann AG are associated (or correlated) with Yokogawa Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yokogawa Electric Corp has no effect on the direction of Aumann AG i.e., Aumann AG and Yokogawa Electric go up and down completely randomly.
Pair Corralation between Aumann AG and Yokogawa Electric
Assuming the 90 days horizon Aumann AG is expected to under-perform the Yokogawa Electric. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aumann AG is 1.64 times less risky than Yokogawa Electric. The pink sheet trades about -0.16 of its potential returns per unit of risk. The Yokogawa Electric Corp is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 5,123 in Yokogawa Electric Corp on August 29, 2024 and sell it today you would lose (741.00) from holding Yokogawa Electric Corp or give up 14.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aumann AG vs. Yokogawa Electric Corp
Performance |
| Timeline |
| Aumann AG |
| Yokogawa Electric Corp |
Aumann AG and Yokogawa Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aumann AG and Yokogawa Electric
The main advantage of trading using opposite Aumann AG and Yokogawa Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aumann AG position performs unexpectedly, Yokogawa Electric 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 Yokogawa Electric will offset losses from the drop in Yokogawa Electric's long position.| Aumann AG vs. Parker Hannifin | Aumann AG vs. Eaton PLC | Aumann AG vs. Dover | Aumann AG vs. Illinois Tool Works |
| Yokogawa Electric vs. Brewbilt Manufacturing | Yokogawa Electric vs. Eaton PLC | Yokogawa Electric vs. ITM Power Plc | Yokogawa Electric vs. Schneider Electric SA |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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