Correlation Between Yokogawa Electric and Nel ASA
Can any of the company-specific risk be diversified away by investing in both Yokogawa Electric and Nel ASA 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 Yokogawa Electric and Nel ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yokogawa Electric and Nel ASA, you can compare the effects of market volatilities on Yokogawa Electric and Nel ASA 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 Yokogawa Electric with a short position of Nel ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yokogawa Electric and Nel ASA.
Diversification Opportunities for Yokogawa Electric and Nel ASA
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yokogawa and Nel is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Yokogawa Electric and Nel ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nel ASA and Yokogawa 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 Yokogawa Electric are associated (or correlated) with Nel ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nel ASA has no effect on the direction of Yokogawa Electric i.e., Yokogawa Electric and Nel ASA go up and down completely randomly.
Pair Corralation between Yokogawa Electric and Nel ASA
Assuming the 90 days horizon Yokogawa Electric is expected to under-perform the Nel ASA. In addition to that, Yokogawa Electric is 20.02 times more volatile than Nel ASA. It trades about -0.09 of its total potential returns per unit of risk. Nel ASA is currently generating about -0.06 per unit of volatility. If you would invest 180.00 in Nel ASA on September 1, 2024 and sell it today you would lose (151.00) from holding Nel ASA or give up 83.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 25.05% |
| Values | Daily Returns |
Yokogawa Electric vs. Nel ASA
Performance |
| Timeline |
| Yokogawa Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nel ASA |
Yokogawa Electric and Nel ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yokogawa Electric and Nel ASA
The main advantage of trading using opposite Yokogawa Electric and Nel ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yokogawa Electric position performs unexpectedly, Nel ASA 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 Nel ASA will offset losses from the drop in Nel ASA's long position.| Yokogawa Electric vs. Daifuku Co | Yokogawa Electric vs. Eaton PLC | Yokogawa Electric vs. Yokogawa Electric Corp | Yokogawa Electric vs. Nidec |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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