Correlation Between Yara International and SEGRO Plc
Can any of the company-specific risk be diversified away by investing in both Yara International and SEGRO Plc 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 SEGRO Plc 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 SEGRO Plc, you can compare the effects of market volatilities on Yara International and SEGRO Plc 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 SEGRO Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yara International and SEGRO Plc.
Diversification Opportunities for Yara International and SEGRO Plc
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Yara and SEGRO is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Yara International ASA and SEGRO Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEGRO Plc 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 SEGRO Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEGRO Plc has no effect on the direction of Yara International i.e., Yara International and SEGRO Plc go up and down completely randomly.
Pair Corralation between Yara International and SEGRO Plc
Assuming the 90 days horizon Yara International ASA is expected to under-perform the SEGRO Plc. But the stock apears to be less risky and, when comparing its historical volatility, Yara International ASA is 1.31 times less risky than SEGRO Plc. The stock trades about -0.01 of its potential returns per unit of risk. The SEGRO Plc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 895.00 in SEGRO Plc on August 31, 2024 and sell it today you would earn a total of 85.00 from holding SEGRO Plc or generate 9.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Yara International ASA vs. SEGRO Plc
Performance |
Timeline |
Yara International ASA |
SEGRO Plc |
Yara International and SEGRO Plc Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Yara International and SEGRO Plc
The main advantage of trading using opposite Yara International and SEGRO Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yara International position performs unexpectedly, SEGRO Plc 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 SEGRO Plc will offset losses from the drop in SEGRO Plc's long position.Yara International vs. SBA Communications Corp | Yara International vs. Hollywood Bowl Group | Yara International vs. Live Nation Entertainment | Yara International vs. LG Display Co |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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