Correlation Between Mapletree Industrial and Yara International
Can any of the company-specific risk be diversified away by investing in both Mapletree Industrial and Yara International 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 Mapletree Industrial and Yara International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mapletree Industrial Trust and Yara International ASA, you can compare the effects of market volatilities on Mapletree Industrial and Yara International 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 Mapletree Industrial with a short position of Yara International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mapletree Industrial and Yara International.
Diversification Opportunities for Mapletree Industrial and Yara International
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mapletree and Yara is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Mapletree Industrial Trust and Yara International ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yara International ASA and Mapletree Industrial 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 Mapletree Industrial Trust are associated (or correlated) with Yara International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yara International ASA has no effect on the direction of Mapletree Industrial i.e., Mapletree Industrial and Yara International go up and down completely randomly.
Pair Corralation between Mapletree Industrial and Yara International
Assuming the 90 days horizon Mapletree Industrial Trust is expected to generate 0.71 times more return on investment than Yara International. However, Mapletree Industrial Trust is 1.4 times less risky than Yara International. It trades about -0.12 of its potential returns per unit of risk. Yara International ASA is currently generating about -0.17 per unit of risk. If you would invest 167.00 in Mapletree Industrial Trust on September 13, 2024 and sell it today you would lose (15.00) from holding Mapletree Industrial Trust or give up 8.98% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Mapletree Industrial Trust vs. Yara International ASA
Performance |
Timeline |
Mapletree Industrial |
Yara International ASA |
Mapletree Industrial and Yara International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mapletree Industrial and Yara International
The main advantage of trading using opposite Mapletree Industrial and Yara International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mapletree Industrial position performs unexpectedly, Yara International 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 Yara International will offset losses from the drop in Yara International's long position.Mapletree Industrial vs. Diamyd Medical AB | Mapletree Industrial vs. Mitsui Chemicals | Mapletree Industrial vs. AIR PRODCHEMICALS | Mapletree Industrial vs. CompuGroup Medical SE |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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