Correlation Between YAMATO HOLDINGS and FirstGroup Plc

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

By analyzing existing cross correlation between YAMATO HOLDINGS and FirstGroup plc, you can compare the effects of market volatilities on YAMATO HOLDINGS and FirstGroup Plc 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 YAMATO HOLDINGS with a short position of FirstGroup Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of YAMATO HOLDINGS and FirstGroup Plc.

Diversification Opportunities for YAMATO HOLDINGS and FirstGroup Plc

0.0

Correlation Coefficient

YAMATO HOLDINGS  FirstGroup Plc

Pay attention - limited upside

The 3 months correlation between YAMATO and FirstGroup is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding YAMATO HOLDINGS and FirstGroup plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstGroup plc and YAMATO HOLDINGS 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 YAMATO HOLDINGS are associated (or correlated) with FirstGroup Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FirstGroup plc has no effect on the direction of YAMATO HOLDINGS i.e., YAMATO HOLDINGS and FirstGroup Plc go up and down completely randomly.

Pair Corralation between YAMATO HOLDINGS and FirstGroup Plc

If you would invest  202.00  in FirstGroup plc on October 7, 2024 and sell it today you would lose (8.00) from holding FirstGroup plc or give up 3.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

YAMATO HOLDINGS  vs.  FirstGroup plc

YAMATO HOLDINGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days YAMATO HOLDINGS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, YAMATO HOLDINGS is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

FirstGroup plc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FirstGroup plc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FirstGroup Plc reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with YAMATO HOLDINGS and FirstGroup Plc

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

The idea behind YAMATO HOLDINGS and FirstGroup plc 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.