Correlation Between Oriental Land and Yamaha
Can any of the company-specific risk be diversified away by investing in both Oriental Land and Yamaha 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 Oriental Land and Yamaha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oriental Land Co and Yamaha, you can compare the effects of market volatilities on Oriental Land and Yamaha 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 Oriental Land with a short position of Yamaha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Land and Yamaha.
Diversification Opportunities for Oriental Land and Yamaha
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Oriental and Yamaha is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Land Co and Yamaha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yamaha and Oriental Land 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 Oriental Land Co are associated (or correlated) with Yamaha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yamaha has no effect on the direction of Oriental Land i.e., Oriental Land and Yamaha go up and down completely randomly.
Pair Corralation between Oriental Land and Yamaha
Assuming the 90 days horizon Oriental Land Co is expected to generate 1.89 times more return on investment than Yamaha. However, Oriental Land is 1.89 times more volatile than Yamaha. It trades about 0.1 of its potential returns per unit of risk. Yamaha is currently generating about 0.15 per unit of risk. If you would invest 2,080 in Oriental Land Co on November 6, 2024 and sell it today you would earn a total of 80.00 from holding Oriental Land Co or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oriental Land Co vs. Yamaha
Performance |
| Timeline |
| Oriental Land |
| Yamaha |
Oriental Land and Yamaha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oriental Land and Yamaha
The main advantage of trading using opposite Oriental Land and Yamaha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Land position performs unexpectedly, Yamaha 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 Yamaha will offset losses from the drop in Yamaha's long position.| Oriental Land vs. RCS MediaGroup SpA | Oriental Land vs. PARKEN Sport Entertainment | Oriental Land vs. CLOVER HEALTH INV | Oriental Land vs. REMEDY ENTERTAINMENT OYJ |
| Yamaha vs. MOVIE GAMES SA | Yamaha vs. TROPHY GAMES DEV | Yamaha vs. Bio Techne Corp | Yamaha vs. Minerals Technologies |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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