Correlation Between Yokohama Rubber and X FAB
Can any of the company-specific risk be diversified away by investing in both Yokohama Rubber and X FAB 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 X FAB 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 X FAB Silicon Foundries, you can compare the effects of market volatilities on Yokohama Rubber and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yokohama Rubber and X FAB.
Diversification Opportunities for Yokohama Rubber and X FAB
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yokohama and XFB is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding The Yokohama Rubber and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of Yokohama Rubber i.e., Yokohama Rubber and X FAB go up and down completely randomly.
Pair Corralation between Yokohama Rubber and X FAB
Assuming the 90 days trading horizon The Yokohama Rubber is expected to generate 0.52 times more return on investment than X FAB. However, The Yokohama Rubber is 1.93 times less risky than X FAB. It trades about 0.05 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about 0.02 per unit of risk. If you would invest 1,980 in The Yokohama Rubber on October 16, 2024 and sell it today you would earn a total of 20.00 from holding The Yokohama Rubber or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Yokohama Rubber vs. X FAB Silicon Foundries
Performance |
| Timeline |
| Yokohama Rubber |
| X FAB Silicon |
Yokohama Rubber and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yokohama Rubber and X FAB
The main advantage of trading using opposite Yokohama Rubber and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yokohama Rubber position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.| Yokohama Rubber vs. T MOBILE US | Yokohama Rubber vs. Easy Software AG | Yokohama Rubber vs. AAC TECHNOLOGHLDGADR | Yokohama Rubber vs. SOFI TECHNOLOGIES |
| X FAB vs. CHRYSALIS INVESTMENTS LTD | X FAB vs. JLF INVESTMENT | X FAB vs. Playa Hotels Resorts | X FAB vs. Hyatt Hotels |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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