Correlation Between YAMAHA CORP and MIRAMAR HOTEL
Can any of the company-specific risk be diversified away by investing in both YAMAHA CORP and MIRAMAR HOTEL 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 CORP and MIRAMAR HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YAMAHA P and MIRAMAR HOTEL INV, you can compare the effects of market volatilities on YAMAHA CORP and MIRAMAR HOTEL 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 CORP with a short position of MIRAMAR HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of YAMAHA CORP and MIRAMAR HOTEL.
Diversification Opportunities for YAMAHA CORP and MIRAMAR HOTEL
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between YAMAHA and MIRAMAR is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding YAMAHA P and MIRAMAR HOTEL INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIRAMAR HOTEL INV and YAMAHA CORP 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 P are associated (or correlated) with MIRAMAR HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIRAMAR HOTEL INV has no effect on the direction of YAMAHA CORP i.e., YAMAHA CORP and MIRAMAR HOTEL go up and down completely randomly.
Pair Corralation between YAMAHA CORP and MIRAMAR HOTEL
Assuming the 90 days trading horizon YAMAHA P is expected to under-perform the MIRAMAR HOTEL. But the stock apears to be less risky and, when comparing its historical volatility, YAMAHA P is 1.45 times less risky than MIRAMAR HOTEL. The stock trades about -0.06 of its potential returns per unit of risk. The MIRAMAR HOTEL INV is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 53.00 in MIRAMAR HOTEL INV on August 31, 2024 and sell it today you would earn a total of 59.00 from holding MIRAMAR HOTEL INV or generate 111.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
YAMAHA P vs. MIRAMAR HOTEL INV
Performance |
| Timeline |
| YAMAHA CORP |
| MIRAMAR HOTEL INV |
YAMAHA CORP and MIRAMAR HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YAMAHA CORP and MIRAMAR HOTEL
The main advantage of trading using opposite YAMAHA CORP and MIRAMAR HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YAMAHA CORP position performs unexpectedly, MIRAMAR HOTEL 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 MIRAMAR HOTEL will offset losses from the drop in MIRAMAR HOTEL's long position.| YAMAHA CORP vs. Apple Inc | YAMAHA CORP vs. Apple Inc | YAMAHA CORP vs. Apple Inc | YAMAHA CORP vs. Apple Inc |
| MIRAMAR HOTEL vs. Lion One Metals | MIRAMAR HOTEL vs. LION ONE METALS | MIRAMAR HOTEL vs. UNIVMUSIC GRPADR050 | MIRAMAR HOTEL vs. Direct Line Insurance |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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