Correlation Between OSRAM LICHT and YASKAWA ELEC

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

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

Diversification Opportunities for OSRAM LICHT and YASKAWA ELEC

0.02

Correlation Coefficient

OSRAM LICHT  YASKAWA ELEC

Significant diversification

The 3 months correlation between OSRAM and YASKAWA is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding OSRAM LICHT N 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 OSRAM LICHT 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 OSRAM LICHT N 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 OSRAM LICHT i.e., OSRAM LICHT and YASKAWA ELEC go up and down completely randomly.

Pair Corralation between OSRAM LICHT and YASKAWA ELEC

Assuming the 90 days trading horizon OSRAM LICHT is expected to generate 3.58 times less return on investment than YASKAWA ELEC. But when comparing it to its historical volatility, OSRAM LICHT N is 11.55 times less risky than YASKAWA ELEC. It trades about 0.16 of its potential returns per unit of risk. YASKAWA ELEC UNSP is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3,380  in YASKAWA ELEC UNSP on April 24, 2025 and sell it today you would earn a total of  260.00  from holding YASKAWA ELEC UNSP or generate 7.69% return on investment over 90 days.

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

OSRAM LICHT N  vs.  YASKAWA ELEC UNSP

OSRAM LICHT N

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in OSRAM LICHT N are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, OSRAM LICHT is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

YASKAWA ELEC UNSP

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in YASKAWA ELEC UNSP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, YASKAWA ELEC may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with OSRAM LICHT and YASKAWA ELEC

The main advantage of trading using opposite OSRAM LICHT and YASKAWA ELEC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OSRAM LICHT 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 OSRAM LICHT N 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.