Correlation Between Big Yellow and Tokyu Construction
Can any of the company-specific risk be diversified away by investing in both Big Yellow and Tokyu Construction 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 Big Yellow and Tokyu Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Big Yellow Group and Tokyu Construction Co, you can compare the effects of market volatilities on Big Yellow and Tokyu Construction 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 Big Yellow with a short position of Tokyu Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Yellow and Tokyu Construction.
Diversification Opportunities for Big Yellow and Tokyu Construction
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Big and Tokyu is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Big Yellow Group and Tokyu Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokyu Construction and Big Yellow 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 Big Yellow Group are associated (or correlated) with Tokyu Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokyu Construction has no effect on the direction of Big Yellow i.e., Big Yellow and Tokyu Construction go up and down completely randomly.
Pair Corralation between Big Yellow and Tokyu Construction
Assuming the 90 days horizon Big Yellow Group is expected to generate 0.88 times more return on investment than Tokyu Construction. However, Big Yellow Group is 1.14 times less risky than Tokyu Construction. It trades about 0.02 of its potential returns per unit of risk. Tokyu Construction Co is currently generating about 0.0 per unit of risk. If you would invest 2,669 in Big Yellow Group on October 11, 2024 and sell it today you would earn a total of 215.00 from holding Big Yellow Group or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Big Yellow Group vs. Tokyu Construction Co
Performance |
| Timeline |
| Big Yellow Group |
| Tokyu Construction |
Big Yellow and Tokyu Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big Yellow and Tokyu Construction
The main advantage of trading using opposite Big Yellow and Tokyu Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Yellow position performs unexpectedly, Tokyu Construction 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 Tokyu Construction will offset losses from the drop in Tokyu Construction's long position.| Big Yellow vs. Magnachip Semiconductor | Big Yellow vs. Summit Materials | Big Yellow vs. Rayonier Advanced Materials | Big Yellow vs. Mitsubishi Materials |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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