Correlation Between Nidec and Yokogawa Electric

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

By analyzing existing cross correlation between Nidec and Yokogawa Electric Corp, you can compare the effects of market volatilities on Nidec and Yokogawa Electric 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 Nidec with a short position of Yokogawa Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nidec and Yokogawa Electric.

Diversification Opportunities for Nidec and Yokogawa Electric

0.0

Correlation Coefficient

Nidec  Yokogawa Electric

Pay attention - limited upside

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

Pair Corralation between Nidec and Yokogawa Electric

If you would invest  4,289  in Yokogawa Electric Corp on May 7, 2025 and sell it today you would earn a total of  1,236  from holding Yokogawa Electric Corp or generate 28.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Nidec  vs.  Yokogawa Electric Corp

Nidec

Risk-Adjusted Performance

Weakest

Over the last 90 days Nidec has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Nidec is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Yokogawa Electric Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Yokogawa Electric Corp are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Yokogawa Electric showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nidec and Yokogawa Electric

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

The idea behind Nidec and Yokogawa Electric Corp 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.