Correlation Between Collins Foods and YASKAWA ELEC

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

By analyzing existing cross correlation between Collins Foods Limited and YASKAWA ELEC UNSP, you can compare the effects of market volatilities on Collins Foods and YASKAWA ELEC 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 Collins Foods with a short position of YASKAWA ELEC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collins Foods and YASKAWA ELEC.

Diversification Opportunities for Collins Foods and YASKAWA ELEC

-0.36

Correlation Coefficient

Collins Foods  YASKAWA ELEC

Very good diversification

The 3 months correlation between Collins and YASKAWA is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Collins Foods Limited and YASKAWA ELEC UNSP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YASKAWA ELEC UNSP and Collins Foods 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 Collins Foods Limited are associated (or correlated) with YASKAWA ELEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YASKAWA ELEC UNSP has no effect on the direction of Collins Foods i.e., Collins Foods and YASKAWA ELEC go up and down completely randomly.

Pair Corralation between Collins Foods and YASKAWA ELEC

Assuming the 90 days horizon Collins Foods is expected to generate 1.18 times less return on investment than YASKAWA ELEC. But when comparing it to its historical volatility, Collins Foods Limited is 1.3 times less risky than YASKAWA ELEC. It trades about 0.08 of its potential returns per unit of risk. YASKAWA ELEC UNSP is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  3,000  in YASKAWA ELEC UNSP on April 22, 2025 and sell it today you would earn a total of  420.00  from holding YASKAWA ELEC UNSP or generate 14.0% return on investment over 90 days.

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

Collins Foods Limited  vs.  YASKAWA ELEC UNSP

Collins Foods Limited

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Collins Foods Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Collins Foods reported solid returns over the last few months and may actually be approaching a breakup point.

YASKAWA ELEC UNSP

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in YASKAWA ELEC UNSP are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, YASKAWA ELEC reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Collins Foods and YASKAWA ELEC

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

The idea behind Collins Foods Limited and YASKAWA ELEC UNSP 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.