Correlation Between NVent Electric and Yaskawa Electric
Can any of the company-specific risk be diversified away by investing in both NVent Electric and Yaskawa 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 NVent Electric and Yaskawa Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between nVent Electric PLC and Yaskawa Electric Corp, you can compare the effects of market volatilities on NVent Electric and Yaskawa 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 NVent Electric with a short position of Yaskawa Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVent Electric and Yaskawa Electric.
Diversification Opportunities for NVent Electric and Yaskawa Electric
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NVent and Yaskawa is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding nVent Electric PLC and Yaskawa Electric Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yaskawa Electric Corp and NVent Electric 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 nVent Electric PLC are associated (or correlated) with Yaskawa Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yaskawa Electric Corp has no effect on the direction of NVent Electric i.e., NVent Electric and Yaskawa Electric go up and down completely randomly.
Pair Corralation between NVent Electric and Yaskawa Electric
Considering the 90-day investment horizon nVent Electric PLC is expected to generate 1.15 times more return on investment than Yaskawa Electric. However, NVent Electric is 1.15 times more volatile than Yaskawa Electric Corp. It trades about 0.13 of its potential returns per unit of risk. Yaskawa Electric Corp is currently generating about -0.16 per unit of risk. If you would invest 6,515 in nVent Electric PLC on August 28, 2024 and sell it today you would earn a total of 1,319 from holding nVent Electric PLC or generate 20.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
nVent Electric PLC vs. Yaskawa Electric Corp
Performance |
| Timeline |
| nVent Electric PLC |
| Yaskawa Electric Corp |
NVent Electric and Yaskawa Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVent Electric and Yaskawa Electric
The main advantage of trading using opposite NVent Electric and Yaskawa Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVent Electric position performs unexpectedly, Yaskawa 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 Yaskawa Electric will offset losses from the drop in Yaskawa Electric's long position.| NVent Electric vs. Hubbell | NVent Electric vs. Advanced Energy Industries | NVent Electric vs. Vertiv Holdings Co | NVent Electric vs. Energizer Holdings |
| Yaskawa Electric vs. FREYR Battery SA | Yaskawa Electric vs. nVent Electric PLC | Yaskawa Electric vs. Hubbell | Yaskawa Electric vs. Advanced Energy Industries |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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