Correlation Between Yara International and SBA Communications
Can any of the company-specific risk be diversified away by investing in both Yara International and SBA Communications 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 Yara International and SBA Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yara International ASA and SBA Communications Corp, you can compare the effects of market volatilities on Yara International and SBA Communications 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 Yara International with a short position of SBA Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yara International and SBA Communications.
Diversification Opportunities for Yara International and SBA Communications
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Yara and SBA is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Yara International ASA and SBA Communications Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBA Communications Corp and Yara International 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 Yara International ASA are associated (or correlated) with SBA Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBA Communications Corp has no effect on the direction of Yara International i.e., Yara International and SBA Communications go up and down completely randomly.
Pair Corralation between Yara International and SBA Communications
Assuming the 90 days horizon Yara International ASA is expected to generate 0.94 times more return on investment than SBA Communications. However, Yara International ASA is 1.07 times less risky than SBA Communications. It trades about -0.01 of its potential returns per unit of risk. SBA Communications Corp is currently generating about -0.02 per unit of risk. If you would invest 2,540 in Yara International ASA on September 2, 2024 and sell it today you would lose (300.00) from holding Yara International ASA or give up 11.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yara International ASA vs. SBA Communications Corp
Performance |
| Timeline |
| Yara International ASA |
| SBA Communications Corp |
Yara International and SBA Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yara International and SBA Communications
The main advantage of trading using opposite Yara International and SBA Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yara International position performs unexpectedly, SBA Communications 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 SBA Communications will offset losses from the drop in SBA Communications' long position.| Yara International vs. National Bank Holdings | Yara International vs. ADRIATIC METALS LS 013355 | Yara International vs. Commonwealth Bank of | Yara International vs. Chiba Bank |
| SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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