Correlation Between YASKAWA ELEC and Alfen NV
Can any of the company-specific risk be diversified away by investing in both YASKAWA ELEC and Alfen NV 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 ELEC and Alfen NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YASKAWA ELEC UNSP and Alfen NV, you can compare the effects of market volatilities on YASKAWA ELEC and Alfen NV 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 ELEC with a short position of Alfen NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of YASKAWA ELEC and Alfen NV.
Diversification Opportunities for YASKAWA ELEC and Alfen NV
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between YASKAWA and Alfen is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding YASKAWA ELEC UNSP and Alfen NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfen NV and YASKAWA ELEC 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 ELEC UNSP are associated (or correlated) with Alfen NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfen NV has no effect on the direction of YASKAWA ELEC i.e., YASKAWA ELEC and Alfen NV go up and down completely randomly.
Pair Corralation between YASKAWA ELEC and Alfen NV
Assuming the 90 days trading horizon YASKAWA ELEC UNSP is expected to under-perform the Alfen NV. But the stock apears to be less risky and, when comparing its historical volatility, YASKAWA ELEC UNSP is 1.42 times less risky than Alfen NV. The stock trades about -0.15 of its potential returns per unit of risk. The Alfen NV is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,135 in Alfen NV on September 24, 2024 and sell it today you would lose (21.00) from holding Alfen NV or give up 1.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YASKAWA ELEC UNSP vs. Alfen NV
Performance |
| Timeline |
| YASKAWA ELEC UNSP |
| Alfen NV |
YASKAWA ELEC and Alfen NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YASKAWA ELEC and Alfen NV
The main advantage of trading using opposite YASKAWA ELEC and Alfen NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YASKAWA ELEC position performs unexpectedly, Alfen NV 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 Alfen NV will offset losses from the drop in Alfen NV's long position.| YASKAWA ELEC vs. Delta Electronics Public | YASKAWA ELEC vs. Plug Power | YASKAWA ELEC vs. VERTIV HOLCL A | YASKAWA ELEC vs. OSRAM LICHT N |
| Alfen NV vs. Delta Electronics Public | Alfen NV vs. YASKAWA ELEC UNSP | Alfen NV vs. Plug Power | Alfen NV vs. VERTIV HOLCL A |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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