Correlation Between China Communications and Hyster-Yale Materials
Can any of the company-specific risk be diversified away by investing in both China Communications and Hyster-Yale Materials 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 China Communications and Hyster-Yale Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Communications Services and Hyster Yale Materials Handling, you can compare the effects of market volatilities on China Communications and Hyster-Yale Materials 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 China Communications with a short position of Hyster-Yale Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Communications and Hyster-Yale Materials.
Diversification Opportunities for China Communications and Hyster-Yale Materials
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Hyster-Yale is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding China Communications Services and Hyster Yale Materials Handling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyster Yale Materials and China Communications 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 China Communications Services are associated (or correlated) with Hyster-Yale Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyster Yale Materials has no effect on the direction of China Communications i.e., China Communications and Hyster-Yale Materials go up and down completely randomly.
Pair Corralation between China Communications and Hyster-Yale Materials
Assuming the 90 days horizon China Communications Services is expected to generate 0.8 times more return on investment than Hyster-Yale Materials. However, China Communications Services is 1.25 times less risky than Hyster-Yale Materials. It trades about 0.16 of its potential returns per unit of risk. Hyster Yale Materials Handling is currently generating about -0.17 per unit of risk. If you would invest 51.00 in China Communications Services on October 9, 2024 and sell it today you would earn a total of 2.00 from holding China Communications Services or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Communications Services vs. Hyster Yale Materials Handling
Performance |
| Timeline |
| China Communications |
| Hyster Yale Materials |
China Communications and Hyster-Yale Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Communications and Hyster-Yale Materials
The main advantage of trading using opposite China Communications and Hyster-Yale Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Communications position performs unexpectedly, Hyster-Yale Materials 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 Hyster-Yale Materials will offset losses from the drop in Hyster-Yale Materials' long position.| China Communications vs. Nippon Telegraph and | China Communications vs. Superior Plus Corp | China Communications vs. NMI Holdings | China Communications vs. SIVERS SEMICONDUCTORS AB |
| Hyster-Yale Materials vs. FIREWEED METALS P | Hyster-Yale Materials vs. GREENX METALS LTD | Hyster-Yale Materials vs. Harmony Gold Mining | Hyster-Yale Materials vs. ADRIATIC METALS LS 013355 |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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