Correlation Between Yoshitsu and Fundamental Global

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

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

Diversification Opportunities for Yoshitsu and Fundamental Global

0.24

Correlation Coefficient

Yoshitsu  Fundamental Global

Modest diversification

The 3 months correlation between Yoshitsu and Fundamental is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Yoshitsu Co Ltd and Fundamental Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundamental Global and Yoshitsu 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 Yoshitsu Co Ltd are associated (or correlated) with Fundamental Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundamental Global has no effect on the direction of Yoshitsu i.e., Yoshitsu and Fundamental Global go up and down completely randomly.

Pair Corralation between Yoshitsu and Fundamental Global

Given the investment horizon of 90 days Yoshitsu Co Ltd is expected to under-perform the Fundamental Global. But the stock apears to be less risky and, when comparing its historical volatility, Yoshitsu Co Ltd is 1.57 times less risky than Fundamental Global. The stock trades about -0.01 of its potential returns per unit of risk. The Fundamental Global is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,956  in Fundamental Global on December 30, 2024 and sell it today you would lose (113.00) from holding Fundamental Global or give up 5.78% of portfolio value over 90 days.

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

Yoshitsu Co Ltd  vs.  Fundamental Global

Yoshitsu

Risk-Adjusted Performance

Very Weak

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

Fundamental Global

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Yoshitsu and Fundamental Global

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

The idea behind Yoshitsu Co Ltd and Fundamental Global 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.