Correlation Between Yokogawa Electric and Vestas Wind
Can any of the company-specific risk be diversified away by investing in both Yokogawa Electric and Vestas Wind 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 Vestas Wind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yokogawa Electric and Vestas Wind Systems, you can compare the effects of market volatilities on Yokogawa Electric and Vestas Wind 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 Vestas Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yokogawa Electric and Vestas Wind.
Diversification Opportunities for Yokogawa Electric and Vestas Wind
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yokogawa and Vestas is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Yokogawa Electric and Vestas Wind Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestas Wind Systems 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 Vestas Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestas Wind Systems has no effect on the direction of Yokogawa Electric i.e., Yokogawa Electric and Vestas Wind go up and down completely randomly.
Pair Corralation between Yokogawa Electric and Vestas Wind
Assuming the 90 days horizon Yokogawa Electric is expected to under-perform the Vestas Wind. In addition to that, Yokogawa Electric is 32.25 times more volatile than Vestas Wind Systems. It trades about -0.09 of its total potential returns per unit of risk. Vestas Wind Systems is currently generating about -0.04 per unit of volatility. If you would invest 893.00 in Vestas Wind Systems on August 29, 2024 and sell it today you would lose (428.00) from holding Vestas Wind Systems or give up 47.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.45% |
| Values | Daily Returns |
Yokogawa Electric vs. Vestas Wind Systems
Performance |
| Timeline |
| Yokogawa Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Vestas Wind Systems |
Yokogawa Electric and Vestas Wind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yokogawa Electric and Vestas Wind
The main advantage of trading using opposite Yokogawa Electric and Vestas Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yokogawa Electric position performs unexpectedly, Vestas Wind 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 Vestas Wind will offset losses from the drop in Vestas Wind's long position.| Yokogawa Electric vs. Daifuku Co | Yokogawa Electric vs. Eaton PLC | Yokogawa Electric vs. Yokogawa Electric Corp | Yokogawa Electric vs. Nidec |
| Vestas Wind vs. Parker Hannifin | Vestas Wind vs. Eaton PLC | Vestas Wind vs. Dover | Vestas Wind vs. Illinois Tool Works |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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