Correlation Between Yamaha and Federal Home
Can any of the company-specific risk be diversified away by investing in both Yamaha and Federal Home 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 Federal Home 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 Federal Home 530, you can compare the effects of market volatilities on Yamaha and Federal Home 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 Federal Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yamaha and Federal Home.
Diversification Opportunities for Yamaha and Federal Home
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yamaha and Federal is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Yamaha Motor Co and Federal Home 530 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Home 530 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 Federal Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Home 530 has no effect on the direction of Yamaha i.e., Yamaha and Federal Home go up and down completely randomly.
Pair Corralation between Yamaha and Federal Home
Assuming the 90 days horizon Yamaha Motor Co is expected to under-perform the Federal Home. But the pink sheet apears to be less risky and, when comparing its historical volatility, Yamaha Motor Co is 9.14 times less risky than Federal Home. The pink sheet trades about -0.1 of its potential returns per unit of risk. The Federal Home 530 is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 662.00 in Federal Home 530 on September 1, 2024 and sell it today you would earn a total of 899.00 from holding Federal Home 530 or generate 135.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yamaha Motor Co vs. Federal Home 530
Performance |
| Timeline |
| Yamaha Motor |
| Federal Home 530 |
Yamaha and Federal Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yamaha and Federal Home
The main advantage of trading using opposite Yamaha and Federal Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yamaha position performs unexpectedly, Federal Home 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 Federal Home will offset losses from the drop in Federal Home's long position.| Yamaha vs. Isuzu Motors | Yamaha vs. Renault SA | Yamaha vs. Mazda Motor Corp | Yamaha vs. Bayerische Motoren Werke |
| Federal Home vs. EvoAir Holdings | Federal Home vs. Zhihu Inc ADR | Federal Home vs. Asure Software | Federal Home vs. AerSale Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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