Correlation Between McGrath RentCorp and Taiyo Yuden
Can any of the company-specific risk be diversified away by investing in both McGrath RentCorp and Taiyo Yuden 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 McGrath RentCorp and Taiyo Yuden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McGrath RentCorp and Taiyo Yuden Co, you can compare the effects of market volatilities on McGrath RentCorp and Taiyo Yuden 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 McGrath RentCorp with a short position of Taiyo Yuden. Check out your portfolio center. Please also check ongoing floating volatility patterns of McGrath RentCorp and Taiyo Yuden.
Diversification Opportunities for McGrath RentCorp and Taiyo Yuden
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between McGrath and Taiyo is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding McGrath RentCorp and Taiyo Yuden Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiyo Yuden and McGrath RentCorp 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 McGrath RentCorp are associated (or correlated) with Taiyo Yuden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiyo Yuden has no effect on the direction of McGrath RentCorp i.e., McGrath RentCorp and Taiyo Yuden go up and down completely randomly.
Pair Corralation between McGrath RentCorp and Taiyo Yuden
Given the investment horizon of 90 days McGrath RentCorp is expected to generate 0.44 times more return on investment than Taiyo Yuden. However, McGrath RentCorp is 2.29 times less risky than Taiyo Yuden. It trades about 0.47 of its potential returns per unit of risk. Taiyo Yuden Co is currently generating about -0.01 per unit of risk. If you would invest 11,066 in McGrath RentCorp on October 29, 2024 and sell it today you would earn a total of 1,200 from holding McGrath RentCorp or generate 10.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
McGrath RentCorp vs. Taiyo Yuden Co
Performance |
| Timeline |
| McGrath RentCorp |
| Taiyo Yuden |
McGrath RentCorp and Taiyo Yuden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McGrath RentCorp and Taiyo Yuden
The main advantage of trading using opposite McGrath RentCorp and Taiyo Yuden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McGrath RentCorp position performs unexpectedly, Taiyo Yuden 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 Taiyo Yuden will offset losses from the drop in Taiyo Yuden's long position.| McGrath RentCorp vs. Atos SE | McGrath RentCorp vs. Deveron Corp | McGrath RentCorp vs. Appen Limited | McGrath RentCorp vs. Atos Origin SA |
| Taiyo Yuden vs. LSI Industries | Taiyo Yuden vs. TTM Technologies | Taiyo Yuden vs. MicroCloud Hologram | Taiyo Yuden vs. KULR Technology Group |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |