Correlation Between Yokohama Rubber and Hastings Technology
Can any of the company-specific risk be diversified away by investing in both Yokohama Rubber and Hastings Technology 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 Yokohama Rubber and Hastings Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Yokohama Rubber and Hastings Technology Metals, you can compare the effects of market volatilities on Yokohama Rubber and Hastings Technology 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 Yokohama Rubber with a short position of Hastings Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yokohama Rubber and Hastings Technology.
Diversification Opportunities for Yokohama Rubber and Hastings Technology
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Yokohama and Hastings is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding The Yokohama Rubber and Hastings Technology Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hastings Technology and Yokohama Rubber 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 The Yokohama Rubber are associated (or correlated) with Hastings Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hastings Technology has no effect on the direction of Yokohama Rubber i.e., Yokohama Rubber and Hastings Technology go up and down completely randomly.
Pair Corralation between Yokohama Rubber and Hastings Technology
Assuming the 90 days trading horizon The Yokohama Rubber is expected to generate 0.29 times more return on investment than Hastings Technology. However, The Yokohama Rubber is 3.43 times less risky than Hastings Technology. It trades about 0.04 of its potential returns per unit of risk. Hastings Technology Metals is currently generating about -0.04 per unit of risk. If you would invest 1,450 in The Yokohama Rubber on September 3, 2024 and sell it today you would earn a total of 440.00 from holding The Yokohama Rubber or generate 30.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Yokohama Rubber vs. Hastings Technology Metals
Performance |
| Timeline |
| Yokohama Rubber |
| Hastings Technology |
Yokohama Rubber and Hastings Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yokohama Rubber and Hastings Technology
The main advantage of trading using opposite Yokohama Rubber and Hastings Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yokohama Rubber position performs unexpectedly, Hastings Technology 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 Hastings Technology will offset losses from the drop in Hastings Technology's long position.| Yokohama Rubber vs. TOTAL GABON | Yokohama Rubber vs. Walgreens Boots Alliance | Yokohama Rubber vs. Peak Resources Limited |
| Hastings Technology vs. Harmony Gold Mining | Hastings Technology vs. GALENA MINING LTD | Hastings Technology vs. Jacquet Metal Service | Hastings Technology vs. Lion One Metals |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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