Correlation Between Yokohama Rubber and ASML HOLDING
Can any of the company-specific risk be diversified away by investing in both Yokohama Rubber and ASML HOLDING 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 ASML HOLDING 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 ASML HOLDING NY, you can compare the effects of market volatilities on Yokohama Rubber and ASML HOLDING 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 ASML HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yokohama Rubber and ASML HOLDING.
Diversification Opportunities for Yokohama Rubber and ASML HOLDING
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yokohama and ASML is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding The Yokohama Rubber and ASML HOLDING NY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASML HOLDING NY 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 ASML HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASML HOLDING NY has no effect on the direction of Yokohama Rubber i.e., Yokohama Rubber and ASML HOLDING go up and down completely randomly.
Pair Corralation between Yokohama Rubber and ASML HOLDING
Assuming the 90 days trading horizon Yokohama Rubber is expected to generate 1.27 times less return on investment than ASML HOLDING. In addition to that, Yokohama Rubber is 1.12 times more volatile than ASML HOLDING NY. It trades about 0.11 of its total potential returns per unit of risk. ASML HOLDING NY is currently generating about 0.16 per unit of volatility. If you would invest 63,000 in ASML HOLDING NY on September 12, 2024 and sell it today you would earn a total of 3,800 from holding ASML HOLDING NY or generate 6.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
The Yokohama Rubber vs. ASML HOLDING NY
Performance |
| Timeline |
| Yokohama Rubber |
| ASML HOLDING NY |
Yokohama Rubber and ASML HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yokohama Rubber and ASML HOLDING
The main advantage of trading using opposite Yokohama Rubber and ASML HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yokohama Rubber position performs unexpectedly, ASML HOLDING 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 ASML HOLDING will offset losses from the drop in ASML HOLDING's long position.| Yokohama Rubber vs. Apple Inc | Yokohama Rubber vs. Apple Inc | Yokohama Rubber vs. Apple Inc | Yokohama Rubber vs. Apple Inc |
| ASML HOLDING vs. The Yokohama Rubber | ASML HOLDING vs. Heidelberg Materials AG | ASML HOLDING vs. Goodyear Tire Rubber | ASML HOLDING vs. Plastic Omnium |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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