Correlation Between American Premium and Hyster Yale

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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 Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

American Premium Water  vs.  Hyster Yale Materials Handling

 Performance 
       Timeline  
American Premium Water 

Risk-Adjusted Performance

22 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in American Premium Water are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, American Premium demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Hyster Yale Materials 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Hyster Yale Materials Handling has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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.
The idea behind American Premium Water and Hyster Yale Materials Handling pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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