Correlation Between Yaskawa Electric and Fuji Electric

Can any of the company-specific risk be diversified away by investing in both Yaskawa Electric and Fuji Electric 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 Yaskawa Electric and Fuji Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yaskawa Electric Corp and Fuji Electric Co, you can compare the effects of market volatilities on Yaskawa Electric and Fuji Electric 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 Yaskawa Electric with a short position of Fuji Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yaskawa Electric and Fuji Electric.

Diversification Opportunities for Yaskawa Electric and Fuji Electric

0.29

Correlation Coefficient

Yaskawa Electric  Fuji Electric

Modest diversification

The 3 months correlation between Yaskawa and Fuji is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Yaskawa Electric Corp and Fuji Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuji Electric and Yaskawa Electric 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 Yaskawa Electric Corp are associated (or correlated) with Fuji Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuji Electric has no effect on the direction of Yaskawa Electric i.e., Yaskawa Electric and Fuji Electric go up and down completely randomly.

Pair Corralation between Yaskawa Electric and Fuji Electric

Assuming the 90 days horizon Yaskawa Electric Corp is expected to under-perform the Fuji Electric. In addition to that, Yaskawa Electric is 1.05 times more volatile than Fuji Electric Co. It trades about -0.11 of its total potential returns per unit of risk. Fuji Electric Co is currently generating about 0.04 per unit of volatility. If you would invest  1,391  in Fuji Electric Co on September 12, 2024 and sell it today you would earn a total of  57.00  from holding Fuji Electric Co or generate 4.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Yaskawa Electric Corp  vs.  Fuji Electric Co

Yaskawa Electric Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yaskawa Electric Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking signals remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Fuji Electric

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fuji Electric Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Fuji Electric is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Yaskawa Electric and Fuji Electric

The main advantage of trading using opposite Yaskawa Electric and Fuji Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yaskawa Electric position performs unexpectedly, Fuji Electric 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 Fuji Electric will offset losses from the drop in Fuji Electric's long position.

The idea behind Yaskawa Electric Corp and Fuji Electric Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Managers module to screen money managers from public funds and ETFs managed around the world.