Correlation Between AmeraMex International and Hino Motors
Can any of the company-specific risk be diversified away by investing in both AmeraMex International and Hino Motors 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 AmeraMex International and Hino Motors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AmeraMex International and Hino Motors Ltd, you can compare the effects of market volatilities on AmeraMex International and Hino Motors 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 AmeraMex International with a short position of Hino Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of AmeraMex International and Hino Motors.
Diversification Opportunities for AmeraMex International and Hino Motors
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AmeraMex and Hino is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding AmeraMex International and Hino Motors Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hino Motors and AmeraMex International 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 AmeraMex International are associated (or correlated) with Hino Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hino Motors has no effect on the direction of AmeraMex International i.e., AmeraMex International and Hino Motors go up and down completely randomly.
Pair Corralation between AmeraMex International and Hino Motors
Given the investment horizon of 90 days AmeraMex International is expected to generate 0.89 times more return on investment than Hino Motors. However, AmeraMex International is 1.13 times less risky than Hino Motors. It trades about -0.06 of its potential returns per unit of risk. Hino Motors Ltd is currently generating about -0.22 per unit of risk. If you would invest 21.00 in AmeraMex International on November 28, 2024 and sell it today you would lose (1.00) from holding AmeraMex International or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AmeraMex International vs. Hino Motors Ltd
Performance |
| Timeline |
| AmeraMex International |
| Hino Motors |
AmeraMex International and Hino Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AmeraMex International and Hino Motors
The main advantage of trading using opposite AmeraMex International and Hino Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AmeraMex International position performs unexpectedly, Hino Motors 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 Hino Motors will offset losses from the drop in Hino Motors' long position.| AmeraMex International vs. First Tractor | AmeraMex International vs. Ag Growth International | AmeraMex International vs. Arts Way Manufacturing Co | AmeraMex International vs. American Premium Water |
| Hino Motors vs. Daimler Truck Holding | Hino Motors vs. Volvo AB ADR | Hino Motors vs. Columbus McKinnon | Hino Motors vs. Hyster Yale Materials Handling |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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