Correlation Between Grand Canal and Yuasa Battery

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

By analyzing existing cross correlation between Grand Canal Land and Yuasa Battery Public, you can compare the effects of market volatilities on Grand Canal and Yuasa Battery 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 Grand Canal with a short position of Yuasa Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canal and Yuasa Battery.

Diversification Opportunities for Grand Canal and Yuasa Battery

-0.53

Correlation Coefficient

Grand Canal  Yuasa Battery

Excellent diversification

The 3 months correlation between Grand and Yuasa is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canal Land and Yuasa Battery Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuasa Battery Public and Grand Canal 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 Grand Canal Land are associated (or correlated) with Yuasa Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuasa Battery Public has no effect on the direction of Grand Canal i.e., Grand Canal and Yuasa Battery go up and down completely randomly.

Pair Corralation between Grand Canal and Yuasa Battery

Assuming the 90 days trading horizon Grand Canal Land is expected to under-perform the Yuasa Battery. In addition to that, Grand Canal is 2.31 times more volatile than Yuasa Battery Public. It trades about -0.14 of its total potential returns per unit of risk. Yuasa Battery Public is currently generating about 0.06 per unit of volatility. If you would invest  990.00  in Yuasa Battery Public on December 22, 2024 and sell it today you would earn a total of  50.00  from holding Yuasa Battery Public or generate 5.05% return on investment over 90 days.

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

Grand Canal Land  vs.  Yuasa Battery Public

Grand Canal Land

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grand Canal Land has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Yuasa Battery Public

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Yuasa Battery Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Yuasa Battery is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Grand Canal and Yuasa Battery

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

The idea behind Grand Canal Land and Yuasa Battery Public 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.