Correlation Between Yaskawa Electric and Tantalus Systems

Can any of the company-specific risk be diversified away by investing in both Yaskawa Electric and Tantalus Systems 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 Tantalus Systems 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 Tantalus Systems Holding, you can compare the effects of market volatilities on Yaskawa Electric and Tantalus Systems 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 Tantalus Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yaskawa Electric and Tantalus Systems.

Diversification Opportunities for Yaskawa Electric and Tantalus Systems

-0.63

Correlation Coefficient

Yaskawa Electric  Tantalus Systems

Excellent diversification

The 3 months correlation between Yaskawa and Tantalus is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Yaskawa Electric Corp and Tantalus Systems Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tantalus Systems Holding 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 Tantalus Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tantalus Systems Holding has no effect on the direction of Yaskawa Electric i.e., Yaskawa Electric and Tantalus Systems go up and down completely randomly.

Pair Corralation between Yaskawa Electric and Tantalus Systems

Assuming the 90 days horizon Yaskawa Electric Corp is expected to under-perform the Tantalus Systems. In addition to that, Yaskawa Electric is 1.34 times more volatile than Tantalus Systems Holding. It trades about -0.11 of its total potential returns per unit of risk. Tantalus Systems Holding is currently generating about 0.15 per unit of volatility. If you would invest  109.00  in Tantalus Systems Holding on September 12, 2024 and sell it today you would earn a total of  17.00  from holding Tantalus Systems Holding or generate 15.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Yaskawa Electric Corp  vs.  Tantalus Systems Holding

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.

Tantalus Systems Holding

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tantalus Systems Holding are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Tantalus Systems reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yaskawa Electric and Tantalus Systems

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

The idea behind Yaskawa Electric Corp and Tantalus Systems Holding 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.