Correlation Between Yaskawa Electric and SMC Corp
Can any of the company-specific risk be diversified away by investing in both Yaskawa Electric and SMC Corp 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 Yaskawa Electric and SMC Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yaskawa Electric Corp and SMC Corp, you can compare the effects of market volatilities on Yaskawa Electric and SMC Corp 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 Yaskawa Electric with a short position of SMC Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yaskawa Electric and SMC Corp.
Diversification Opportunities for Yaskawa Electric and SMC Corp
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yaskawa and SMC is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Yaskawa Electric Corp and SMC Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMC Corp and Yaskawa Electric 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 Yaskawa Electric Corp are associated (or correlated) with SMC Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMC Corp has no effect on the direction of Yaskawa Electric i.e., Yaskawa Electric and SMC Corp go up and down completely randomly.
Pair Corralation between Yaskawa Electric and SMC Corp
Assuming the 90 days horizon Yaskawa Electric Corp is expected to under-perform the SMC Corp. But the pink sheet apears to be less risky and, when comparing its historical volatility, Yaskawa Electric Corp is 1.05 times less risky than SMC Corp. The pink sheet trades about -0.02 of its potential returns per unit of risk. The SMC Corp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 48,666 in SMC Corp on November 19, 2024 and sell it today you would lose (14,066) from holding SMC Corp or give up 28.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Yaskawa Electric Corp vs. SMC Corp
Performance |
| Timeline |
| Yaskawa Electric Corp |
| SMC Corp |
Yaskawa Electric and SMC Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yaskawa Electric and SMC Corp
The main advantage of trading using opposite Yaskawa Electric and SMC Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yaskawa Electric position performs unexpectedly, SMC Corp 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 SMC Corp will offset losses from the drop in SMC Corp's long position.| Yaskawa Electric vs. Fanuc | Yaskawa Electric vs. OMRON Corp ADR | Yaskawa Electric vs. Mitsubishi Electric Corp | Yaskawa Electric vs. Keyence |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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