Correlation Between Yoshitsu and State Street

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Can any of the company-specific risk be diversified away by investing in both Yoshitsu and State Street 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 State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yoshitsu Co and State Street, you can compare the effects of market volatilities on Yoshitsu and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yoshitsu and State Street.

Diversification Opportunities for Yoshitsu and State Street

-0.43
  Correlation Coefficient

Very good diversification

The 3 months correlation between Yoshitsu and State is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Yoshitsu Co Ltd and State Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street 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 are associated (or correlated) with State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street has no effect on the direction of Yoshitsu i.e., Yoshitsu and State Street go up and down completely randomly.

Pair Corralation between Yoshitsu and State Street

Given the investment horizon of 90 days Yoshitsu Co is expected to under-perform the State Street. In addition to that, Yoshitsu is 7.54 times more volatile than State Street. It trades about -0.03 of its total potential returns per unit of risk. State Street is currently generating about 0.02 per unit of volatility. If you would invest  2,297  in State Street on December 30, 2023 and sell it today you would earn a total of  152.00  from holding State Street or generate 6.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Yoshitsu Co Ltd  vs.  State Street

 Performance 
       Timeline  
Yoshitsu 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Yoshitsu Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in April 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
State Street 

Risk-Adjusted Performance

10 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in State Street are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, State Street is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Yoshitsu and State Street Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Yoshitsu and State Street

The main advantage of trading using opposite Yoshitsu and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yoshitsu position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.
The idea behind Yoshitsu Co and State Street 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.
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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