Correlation Between Retail Estates and Yokohama Rubber
Can any of the company-specific risk be diversified away by investing in both Retail Estates and Yokohama Rubber 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 Retail Estates and Yokohama Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Estates NV and The Yokohama Rubber, you can compare the effects of market volatilities on Retail Estates and Yokohama Rubber 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 Retail Estates with a short position of Yokohama Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and Yokohama Rubber.
Diversification Opportunities for Retail Estates and Yokohama Rubber
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Retail and Yokohama is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates NV and The Yokohama Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yokohama Rubber and Retail Estates 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 Retail Estates NV are associated (or correlated) with Yokohama Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yokohama Rubber has no effect on the direction of Retail Estates i.e., Retail Estates and Yokohama Rubber go up and down completely randomly.
Pair Corralation between Retail Estates and Yokohama Rubber
Assuming the 90 days horizon Retail Estates NV is expected to under-perform the Yokohama Rubber. But the stock apears to be less risky and, when comparing its historical volatility, Retail Estates NV is 1.54 times less risky than Yokohama Rubber. The stock trades about -0.23 of its potential returns per unit of risk. The The Yokohama Rubber is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,920 in The Yokohama Rubber on September 18, 2024 and sell it today you would earn a total of 60.00 from holding The Yokohama Rubber or generate 3.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Retail Estates NV vs. The Yokohama Rubber
Performance |
Timeline |
Retail Estates NV |
Yokohama Rubber |
Retail Estates and Yokohama Rubber Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Retail Estates and Yokohama Rubber
The main advantage of trading using opposite Retail Estates and Yokohama Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates position performs unexpectedly, Yokohama Rubber 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 Yokohama Rubber will offset losses from the drop in Yokohama Rubber's long position.Retail Estates vs. Vicinity Centres | Retail Estates vs. Superior Plus Corp | Retail Estates vs. NMI Holdings | Retail Estates vs. SIVERS SEMICONDUCTORS AB |
Yokohama Rubber vs. Retail Estates NV | Yokohama Rubber vs. AEON STORES | Yokohama Rubber vs. Caseys General Stores | Yokohama Rubber vs. ALBIS LEASING AG |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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