Correlation Between American Premium and Hyster Yale
Can any of the company-specific risk be diversified away by investing in both American Premium 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 American Premium and Hyster Yale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Premium Water and Hyster Yale Materials Handling, you can compare the effects of market volatilities on American Premium 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 American Premium with a short position of Hyster Yale. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Premium and Hyster Yale.
Diversification Opportunities for American Premium and Hyster Yale
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Hyster is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding American Premium Water 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 American Premium 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 American Premium Water 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 American Premium i.e., American Premium and Hyster Yale go up and down completely randomly.
Pair Corralation between American Premium and Hyster Yale
Given the investment horizon of 90 days American Premium Water is expected to generate 79.45 times more return on investment than Hyster Yale. However, American Premium is 79.45 times more volatile than Hyster Yale Materials Handling. It trades about 0.28 of its potential returns per unit of risk. Hyster Yale Materials Handling is currently generating about -0.14 per unit of risk. If you would invest 0.00 in American Premium Water on August 30, 2024 and sell it today you would earn a total of 0.01 from holding American Premium Water or generate 9.223372036854776E16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
American Premium Water vs. Hyster Yale Materials Handling
Performance |
Timeline |
American Premium Water |
Hyster Yale Materials |
American Premium and Hyster Yale Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Premium and Hyster Yale
The main advantage of trading using opposite American Premium and Hyster Yale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Premium 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.American Premium vs. First Tractor | American Premium vs. Ag Growth International | American Premium vs. AmeraMex International | American Premium vs. Arts Way Manufacturing Co |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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