Correlation Between Yokogawa Electric and Nordex SE
Can any of the company-specific risk be diversified away by investing in both Yokogawa Electric and Nordex SE 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 Nordex SE 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 Nordex SE, you can compare the effects of market volatilities on Yokogawa Electric and Nordex SE 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 Nordex SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yokogawa Electric and Nordex SE.
Diversification Opportunities for Yokogawa Electric and Nordex SE
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yokogawa and Nordex is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Yokogawa Electric Corp and Nordex SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordex SE 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 Nordex SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordex SE has no effect on the direction of Yokogawa Electric i.e., Yokogawa Electric and Nordex SE go up and down completely randomly.
Pair Corralation between Yokogawa Electric and Nordex SE
Assuming the 90 days horizon Yokogawa Electric Corp is expected to under-perform the Nordex SE. But the pink sheet apears to be less risky and, when comparing its historical volatility, Yokogawa Electric Corp is 1.14 times less risky than Nordex SE. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Nordex SE is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,550 in Nordex SE on September 1, 2024 and sell it today you would lose (127.00) from holding Nordex SE or give up 8.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yokogawa Electric Corp vs. Nordex SE
Performance |
| Timeline |
| Yokogawa Electric Corp |
| Nordex SE |
Yokogawa Electric and Nordex SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yokogawa Electric and Nordex SE
The main advantage of trading using opposite Yokogawa Electric and Nordex SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yokogawa Electric position performs unexpectedly, Nordex SE 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 Nordex SE will offset losses from the drop in Nordex SE's long position.| Yokogawa Electric vs. GE Aerospace | Yokogawa Electric vs. Eaton PLC | Yokogawa Electric vs. Siemens AG Class | Yokogawa Electric vs. Parker Hannifin |
| Nordex SE vs. GE Aerospace | Nordex SE vs. Eaton PLC | Nordex SE vs. Siemens AG Class | Nordex SE vs. Parker Hannifin |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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