Correlation Between Hino Motors and Manitowoc
Can any of the company-specific risk be diversified away by investing in both Hino Motors and Manitowoc 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 Hino Motors and Manitowoc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hino Motors Ltd and Manitowoc, you can compare the effects of market volatilities on Hino Motors and Manitowoc 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 Hino Motors with a short position of Manitowoc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hino Motors and Manitowoc.
Diversification Opportunities for Hino Motors and Manitowoc
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hino and Manitowoc is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hino Motors Ltd and Manitowoc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manitowoc and Hino Motors 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 Hino Motors Ltd are associated (or correlated) with Manitowoc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manitowoc has no effect on the direction of Hino Motors i.e., Hino Motors and Manitowoc go up and down completely randomly.
Pair Corralation between Hino Motors and Manitowoc
Assuming the 90 days horizon Hino Motors Ltd is expected to under-perform the Manitowoc. But the pink sheet apears to be less risky and, when comparing its historical volatility, Hino Motors Ltd is 1.7 times less risky than Manitowoc. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Manitowoc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 939.00 in Manitowoc on August 28, 2024 and sell it today you would earn a total of 156.00 from holding Manitowoc or generate 16.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hino Motors Ltd vs. Manitowoc
Performance |
| Timeline |
| Hino Motors |
| Manitowoc |
Hino Motors and Manitowoc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hino Motors and Manitowoc
The main advantage of trading using opposite Hino Motors and Manitowoc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hino Motors position performs unexpectedly, Manitowoc 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 Manitowoc will offset losses from the drop in Manitowoc's long position.| Hino Motors vs. Daimler Truck Holding | Hino Motors vs. Volvo AB ADR | Hino Motors vs. Columbus McKinnon | Hino Motors vs. Hyster Yale Materials Handling |
| Manitowoc vs. Oshkosh | Manitowoc vs. Alamo Group | Manitowoc vs. Wabash National | Manitowoc 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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