Correlation Between Itochu Corp and Yoma Strategic
Can any of the company-specific risk be diversified away by investing in both Itochu Corp and Yoma Strategic 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 Itochu Corp and Yoma Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Itochu Corp ADR and Yoma Strategic Holdings, you can compare the effects of market volatilities on Itochu Corp and Yoma Strategic 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 Itochu Corp with a short position of Yoma Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itochu Corp and Yoma Strategic.
Diversification Opportunities for Itochu Corp and Yoma Strategic
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Itochu and Yoma is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Itochu Corp ADR and Yoma Strategic Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yoma Strategic Holdings and Itochu Corp 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 Itochu Corp ADR are associated (or correlated) with Yoma Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yoma Strategic Holdings has no effect on the direction of Itochu Corp i.e., Itochu Corp and Yoma Strategic go up and down completely randomly.
Pair Corralation between Itochu Corp and Yoma Strategic
Assuming the 90 days horizon Itochu Corp ADR is expected to generate 0.29 times more return on investment than Yoma Strategic. However, Itochu Corp ADR is 3.41 times less risky than Yoma Strategic. It trades about -0.01 of its potential returns per unit of risk. Yoma Strategic Holdings is currently generating about -0.22 per unit of risk. If you would invest 9,994 in Itochu Corp ADR on September 20, 2024 and sell it today you would lose (44.00) from holding Itochu Corp ADR or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Itochu Corp ADR vs. Yoma Strategic Holdings
Performance |
| Timeline |
| Itochu Corp ADR |
| Yoma Strategic Holdings |
Itochu Corp and Yoma Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Itochu Corp and Yoma Strategic
The main advantage of trading using opposite Itochu Corp and Yoma Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itochu Corp position performs unexpectedly, Yoma Strategic 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 Yoma Strategic will offset losses from the drop in Yoma Strategic's long position.| Itochu Corp vs. Arca Continental SAB | Itochu Corp vs. Becle SA de | Itochu Corp vs. Aquagold International | Itochu Corp vs. Morningstar Unconstrained Allocation |
| Yoma Strategic vs. Teijin | Yoma Strategic vs. Halma plc | Yoma Strategic vs. Keppel Limited | Yoma Strategic vs. Ayala Corp ADR |
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 CEOs Directory module to screen CEOs from public companies around the world.
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