Correlation Between Hyster Yale and AGCO
Can any of the company-specific risk be diversified away by investing in both Hyster Yale and AGCO 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 Hyster Yale and AGCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyster Yale Materials Handling and AGCO Corporation, you can compare the effects of market volatilities on Hyster Yale and AGCO 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 Hyster Yale with a short position of AGCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyster Yale and AGCO.
Diversification Opportunities for Hyster Yale and AGCO
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyster and AGCO is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hyster Yale Materials Handling and AGCO Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGCO and Hyster Yale 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 Hyster Yale Materials Handling are associated (or correlated) with AGCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGCO has no effect on the direction of Hyster Yale i.e., Hyster Yale and AGCO go up and down completely randomly.
Pair Corralation between Hyster Yale and AGCO
Allowing for the 90-day total investment horizon Hyster Yale Materials Handling is expected to generate 1.77 times more return on investment than AGCO. However, Hyster Yale is 1.77 times more volatile than AGCO Corporation. It trades about 0.06 of its potential returns per unit of risk. AGCO Corporation is currently generating about -0.02 per unit of risk. If you would invest 2,953 in Hyster Yale Materials Handling on August 24, 2024 and sell it today you would earn a total of 2,589 from holding Hyster Yale Materials Handling or generate 87.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyster Yale Materials Handling vs. AGCO Corp.
Performance |
| Timeline |
| Hyster Yale Materials |
| AGCO |
Hyster Yale and AGCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyster Yale and AGCO
The main advantage of trading using opposite Hyster Yale and AGCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyster Yale position performs unexpectedly, AGCO 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 AGCO will offset losses from the drop in AGCO's long position.| Hyster Yale vs. Astec Industries | Hyster Yale vs. Manitex International | Hyster Yale vs. Shyft Group | Hyster Yale vs. Rev 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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