Correlation Between CNH Industrial and Hyster Yale
Can any of the company-specific risk be diversified away by investing in both CNH Industrial and Hyster Yale 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 CNH Industrial and Hyster Yale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNH Industrial NV and Hyster Yale Materials Handling, you can compare the effects of market volatilities on CNH Industrial and Hyster Yale 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 CNH Industrial with a short position of Hyster Yale. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNH Industrial and Hyster Yale.
Diversification Opportunities for CNH Industrial and Hyster Yale
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CNH and Hyster is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding CNH Industrial NV 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 CNH Industrial 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 CNH Industrial NV are associated (or correlated) with Hyster Yale. 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 CNH Industrial i.e., CNH Industrial and Hyster Yale go up and down completely randomly.
Pair Corralation between CNH Industrial and Hyster Yale
Considering the 90-day investment horizon CNH Industrial is expected to generate 12.08 times less return on investment than Hyster Yale. But when comparing it to its historical volatility, CNH Industrial NV is 1.52 times less risky than Hyster Yale. It trades about 0.0 of its potential returns per unit of risk. Hyster Yale Materials Handling is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,248 in Hyster Yale Materials Handling on November 1, 2024 and sell it today you would earn a total of 1,171 from holding Hyster Yale Materials Handling or generate 27.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNH Industrial NV vs. Hyster Yale Materials Handling
Performance |
| Timeline |
| CNH Industrial NV |
| Hyster Yale Materials |
CNH Industrial and Hyster Yale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNH Industrial and Hyster Yale
The main advantage of trading using opposite CNH Industrial and Hyster Yale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNH Industrial position performs unexpectedly, Hyster Yale 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 will offset losses from the drop in Hyster Yale's long position.| CNH Industrial vs. Tradeweb Markets | CNH Industrial vs. Alternative Investment | CNH Industrial vs. Compania Cervecerias Unidas | CNH Industrial vs. Summit Hotel Properties |
| Hyster Yale vs. Astec Industries | Hyster Yale vs. Shyft Group | Hyster Yale vs. Rev Group | Hyster Yale vs. Alamo Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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