Correlation Between Isuzu Motors and Yamaha

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

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

Diversification Opportunities for Isuzu Motors and Yamaha

0.02

Correlation Coefficient

Isuzu Motors  Yamaha

Significant diversification

The 3 months correlation between Isuzu and Yamaha is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Isuzu Motors and Yamaha Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yamaha Motor and Isuzu Motors 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 Isuzu Motors are associated (or correlated) with Yamaha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yamaha Motor has no effect on the direction of Isuzu Motors i.e., Isuzu Motors and Yamaha go up and down completely randomly.

Pair Corralation between Isuzu Motors and Yamaha

Assuming the 90 days horizon Isuzu Motors is expected to under-perform the Yamaha. But the pink sheet apears to be less risky and, when comparing its historical volatility, Isuzu Motors is 1.2 times less risky than Yamaha. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Yamaha Motor Co is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  885.00  in Yamaha Motor Co on September 4, 2024 and sell it today you would lose (55.00) from holding Yamaha Motor Co or give up 6.21% of portfolio value over 90 days.

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

Isuzu Motors  vs.  Yamaha Motor Co

Isuzu Motors

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Isuzu Motors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Yamaha Motor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yamaha Motor Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Yamaha is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Isuzu Motors and Yamaha

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

The idea behind Isuzu Motors and Yamaha Motor 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 Stocks Directory module to find actively traded stocks across global markets.