Correlation Between Yokogawa Electric and Graco
Can any of the company-specific risk be diversified away by investing in both Yokogawa Electric and Graco 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 Graco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yokogawa Electric Corp and Graco Inc, you can compare the effects of market volatilities on Yokogawa Electric and Graco 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 Graco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yokogawa Electric and Graco.
Diversification Opportunities for Yokogawa Electric and Graco
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yokogawa and Graco is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Yokogawa Electric Corp and Graco Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graco Inc 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 Corp are associated (or correlated) with Graco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graco Inc has no effect on the direction of Yokogawa Electric i.e., Yokogawa Electric and Graco go up and down completely randomly.
Pair Corralation between Yokogawa Electric and Graco
Assuming the 90 days horizon Yokogawa Electric Corp is expected to under-perform the Graco. In addition to that, Yokogawa Electric is 1.84 times more volatile than Graco Inc. It trades about -0.14 of its total potential returns per unit of risk. Graco Inc is currently generating about 0.32 per unit of volatility. If you would invest 8,145 in Graco Inc on August 29, 2024 and sell it today you would earn a total of 916.00 from holding Graco Inc or generate 11.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Yokogawa Electric Corp vs. Graco Inc
Performance |
| Timeline |
| Yokogawa Electric Corp |
| Graco Inc |
Yokogawa Electric and Graco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yokogawa Electric and Graco
The main advantage of trading using opposite Yokogawa Electric and Graco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yokogawa Electric position performs unexpectedly, Graco 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 Graco will offset losses from the drop in Graco's long position.| Yokogawa Electric vs. Brewbilt Manufacturing | Yokogawa Electric vs. Eaton PLC | Yokogawa Electric vs. ITM Power Plc | Yokogawa Electric vs. Schneider Electric SA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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