Correlation Between Yokohama Rubber and Yue Da
Can any of the company-specific risk be diversified away by investing in both Yokohama Rubber and Yue Da 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 Yue Da 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 Yue Da International, you can compare the effects of market volatilities on Yokohama Rubber and Yue Da 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 Yue Da. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yokohama Rubber and Yue Da.
Diversification Opportunities for Yokohama Rubber and Yue Da
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Yokohama and Yue is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding The Yokohama Rubber and Yue Da International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yue Da International 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 Yue Da. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yue Da International has no effect on the direction of Yokohama Rubber i.e., Yokohama Rubber and Yue Da go up and down completely randomly.
Pair Corralation between Yokohama Rubber and Yue Da
Assuming the 90 days trading horizon Yokohama Rubber is expected to generate 91.82 times less return on investment than Yue Da. But when comparing it to its historical volatility, The Yokohama Rubber is 25.91 times less risky than Yue Da. It trades about 0.04 of its potential returns per unit of risk. Yue Da International is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.14 in Yue Da International on September 12, 2024 and sell it today you would earn a total of 1.41 from holding Yue Da International or generate 1007.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
The Yokohama Rubber vs. Yue Da International
Performance |
| Timeline |
| Yokohama Rubber |
| Yue Da International |
Yokohama Rubber and Yue Da Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yokohama Rubber and Yue Da
The main advantage of trading using opposite Yokohama Rubber and Yue Da positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yokohama Rubber position performs unexpectedly, Yue Da 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 Yue Da will offset losses from the drop in Yue Da's long position.| Yokohama Rubber vs. Apple Inc | Yokohama Rubber vs. Apple Inc | Yokohama Rubber vs. Apple Inc | Yokohama Rubber vs. Apple Inc |
| Yue Da vs. BANKINTER ADR 2007 | Yue Da vs. The Yokohama Rubber | Yue Da vs. MBANK | Yue Da vs. PT Bank Maybank |
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 CEOs Directory module to screen CEOs from public companies around the world.
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