Correlation Between Eagle Materials and Hyster-Yale Materials
Can any of the company-specific risk be diversified away by investing in both Eagle Materials 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 Eagle Materials 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 Eagle Materials and Hyster Yale Materials Handling, you can compare the effects of market volatilities on Eagle Materials 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 Eagle Materials with a short position of Hyster-Yale Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Materials and Hyster-Yale Materials.
Diversification Opportunities for Eagle Materials and Hyster-Yale Materials
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eagle and Hyster-Yale is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Materials 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 Eagle Materials 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 Eagle Materials 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 Eagle Materials i.e., Eagle Materials and Hyster-Yale Materials go up and down completely randomly.
Pair Corralation between Eagle Materials and Hyster-Yale Materials
Assuming the 90 days horizon Eagle Materials is expected to generate 0.66 times more return on investment than Hyster-Yale Materials. However, Eagle Materials is 1.51 times less risky than Hyster-Yale Materials. It trades about 0.12 of its potential returns per unit of risk. Hyster Yale Materials Handling is currently generating about 0.04 per unit of risk. If you would invest 16,522 in Eagle Materials on August 26, 2024 and sell it today you would earn a total of 13,278 from holding Eagle Materials or generate 80.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Materials vs. Hyster Yale Materials Handling
Performance |
| Timeline |
| Eagle Materials |
| Hyster Yale Materials |
Eagle Materials and Hyster-Yale Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Materials and Hyster-Yale Materials
The main advantage of trading using opposite Eagle Materials and Hyster-Yale Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Materials 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.| Eagle Materials vs. HeidelbergCement AG | Eagle Materials vs. Superior Plus Corp | Eagle Materials vs. NMI Holdings | Eagle Materials vs. Origin Agritech |
| Hyster-Yale Materials vs. KION Group AG | Hyster-Yale Materials vs. Sinotruk Limited | Hyster-Yale Materials vs. Superior Plus Corp | Hyster-Yale Materials vs. NMI Holdings |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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