Correlation Between Astec Industries and Shyft
Can any of the company-specific risk be diversified away by investing in both Astec Industries and Shyft 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 Astec Industries and Shyft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astec Industries and Shyft Group, you can compare the effects of market volatilities on Astec Industries and Shyft 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 Astec Industries with a short position of Shyft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astec Industries and Shyft.
Diversification Opportunities for Astec Industries and Shyft
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Astec and Shyft is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Astec Industries and Shyft Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shyft Group and Astec Industries 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 Astec Industries are associated (or correlated) with Shyft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shyft Group has no effect on the direction of Astec Industries i.e., Astec Industries and Shyft go up and down completely randomly.
Pair Corralation between Astec Industries and Shyft
Given the investment horizon of 90 days Astec Industries is expected to under-perform the Shyft. In addition to that, Astec Industries is 1.06 times more volatile than Shyft Group. It trades about -0.05 of its total potential returns per unit of risk. Shyft Group is currently generating about -0.03 per unit of volatility. If you would invest 1,242 in Shyft Group on November 18, 2024 and sell it today you would lose (21.00) from holding Shyft Group or give up 1.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astec Industries vs. Shyft Group
Performance |
| Timeline |
| Astec Industries |
| Shyft Group |
Astec Industries and Shyft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astec Industries and Shyft
The main advantage of trading using opposite Astec Industries and Shyft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astec Industries position performs unexpectedly, Shyft 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 Shyft will offset losses from the drop in Shyft's long position.| Astec Industries vs. Hyster Yale Materials Handling | Astec Industries vs. Shyft Group | Astec Industries vs. Rev Group | Astec Industries vs. Lindsay |
| Shyft vs. Astec Industries | Shyft vs. Hyster Yale Materials Handling | Shyft vs. Rev Group | Shyft vs. Lindsay |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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