Correlation Between Sharp Corp and Taiyo Yuden

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

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

Diversification Opportunities for Sharp Corp and Taiyo Yuden

-0.66

Correlation Coefficient

Sharp Corp  Taiyo Yuden

Excellent diversification

The 3 months correlation between Sharp and Taiyo is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Sharp Corp ADR and Taiyo Yuden Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiyo Yuden and Sharp Corp 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 Sharp Corp ADR are associated (or correlated) with Taiyo Yuden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiyo Yuden has no effect on the direction of Sharp Corp i.e., Sharp Corp and Taiyo Yuden go up and down completely randomly.

Pair Corralation between Sharp Corp and Taiyo Yuden

Assuming the 90 days horizon Sharp Corp ADR is expected to under-perform the Taiyo Yuden. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sharp Corp ADR is 1.43 times less risky than Taiyo Yuden. The pink sheet trades about -0.11 of its potential returns per unit of risk. The Taiyo Yuden Co is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  5,915  in Taiyo Yuden Co on May 5, 2025 and sell it today you would earn a total of  1,649  from holding Taiyo Yuden Co or generate 27.88% return on investment over 90 days.

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

Sharp Corp ADR  vs.  Taiyo Yuden Co

Sharp Corp ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sharp Corp ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Taiyo Yuden

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Taiyo Yuden Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Taiyo Yuden showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sharp Corp and Taiyo Yuden

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

The idea behind Sharp Corp ADR and Taiyo Yuden Co 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 Stocks Directory module to find actively traded stocks across global markets.