Correlation Between Yamaha and Cardinal Energy
Can any of the company-specific risk be diversified away by investing in both Yamaha and Cardinal Energy 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 Yamaha and Cardinal Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yamaha Motor Co and Cardinal Energy, you can compare the effects of market volatilities on Yamaha and Cardinal Energy 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 Yamaha with a short position of Cardinal Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yamaha and Cardinal Energy.
Diversification Opportunities for Yamaha and Cardinal Energy
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yamaha and Cardinal is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Yamaha Motor Co and Cardinal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Energy and Yamaha 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 Yamaha Motor Co are associated (or correlated) with Cardinal Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Energy has no effect on the direction of Yamaha i.e., Yamaha and Cardinal Energy go up and down completely randomly.
Pair Corralation between Yamaha and Cardinal Energy
Assuming the 90 days horizon Yamaha Motor Co is expected to under-perform the Cardinal Energy. In addition to that, Yamaha is 1.54 times more volatile than Cardinal Energy. It trades about -0.11 of its total potential returns per unit of risk. Cardinal Energy is currently generating about 0.15 per unit of volatility. If you would invest 453.00 in Cardinal Energy on September 2, 2024 and sell it today you would earn a total of 18.00 from holding Cardinal Energy or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yamaha Motor Co vs. Cardinal Energy
Performance |
| Timeline |
| Yamaha Motor |
| Cardinal Energy |
Yamaha and Cardinal Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yamaha and Cardinal Energy
The main advantage of trading using opposite Yamaha and Cardinal Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yamaha position performs unexpectedly, Cardinal Energy 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 Cardinal Energy will offset losses from the drop in Cardinal Energy's long position.| Yamaha vs. Isuzu Motors | Yamaha vs. Renault SA | Yamaha vs. Mazda Motor Corp | Yamaha vs. Bayerische Motoren Werke |
| Cardinal Energy vs. Tamarack Valley Energy | Cardinal Energy vs. Pine Cliff Energy | Cardinal Energy vs. MEG Energy Corp | Cardinal Energy vs. Headwater Exploration |
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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