Correlation Between Yokohama Rubber and Gemfields Group
Can any of the company-specific risk be diversified away by investing in both Yokohama Rubber and Gemfields Group 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 Yokohama Rubber and Gemfields Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Yokohama Rubber and Gemfields Group Limited, you can compare the effects of market volatilities on Yokohama Rubber and Gemfields Group 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 Yokohama Rubber with a short position of Gemfields Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yokohama Rubber and Gemfields Group.
Diversification Opportunities for Yokohama Rubber and Gemfields Group
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yokohama and Gemfields is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding The Yokohama Rubber and Gemfields Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemfields Group and Yokohama Rubber 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 The Yokohama Rubber are associated (or correlated) with Gemfields Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemfields Group has no effect on the direction of Yokohama Rubber i.e., Yokohama Rubber and Gemfields Group go up and down completely randomly.
Pair Corralation between Yokohama Rubber and Gemfields Group
Assuming the 90 days trading horizon The Yokohama Rubber is expected to generate 0.17 times more return on investment than Gemfields Group. However, The Yokohama Rubber is 5.81 times less risky than Gemfields Group. It trades about 0.14 of its potential returns per unit of risk. Gemfields Group Limited is currently generating about -0.01 per unit of risk. If you would invest 1,960 in The Yokohama Rubber on October 10, 2024 and sell it today you would earn a total of 60.00 from holding The Yokohama Rubber or generate 3.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 94.44% |
Values | Daily Returns |
The Yokohama Rubber vs. Gemfields Group Limited
Performance |
Timeline |
Yokohama Rubber |
Gemfields Group |
Yokohama Rubber and Gemfields Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Yokohama Rubber and Gemfields Group
The main advantage of trading using opposite Yokohama Rubber and Gemfields Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yokohama Rubber position performs unexpectedly, Gemfields Group 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 Gemfields Group will offset losses from the drop in Gemfields Group's long position.Yokohama Rubber vs. EVS Broadcast Equipment | Yokohama Rubber vs. Gaztransport Technigaz SA | Yokohama Rubber vs. GOLD ROAD RES | Yokohama Rubber vs. United Breweries Co |
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Check out your portfolio center.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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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