Correlation Between Hyster Yale and Daimler Truck
Can any of the company-specific risk be diversified away by investing in both Hyster Yale and Daimler Truck 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 Daimler Truck 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 Daimler Truck Holding, you can compare the effects of market volatilities on Hyster Yale and Daimler Truck 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 Daimler Truck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyster Yale and Daimler Truck.
Diversification Opportunities for Hyster Yale and Daimler Truck
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hyster and Daimler is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hyster Yale Materials Handling and Daimler Truck Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daimler Truck Holding 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 Daimler Truck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daimler Truck Holding has no effect on the direction of Hyster Yale i.e., Hyster Yale and Daimler Truck go up and down completely randomly.
Pair Corralation between Hyster Yale and Daimler Truck
Allowing for the 90-day total investment horizon Hyster Yale is expected to generate 1.15 times less return on investment than Daimler Truck. In addition to that, Hyster Yale is 1.68 times more volatile than Daimler Truck Holding. It trades about 0.02 of its total potential returns per unit of risk. Daimler Truck Holding is currently generating about 0.04 per unit of volatility. If you would invest 1,504 in Daimler Truck Holding on August 31, 2024 and sell it today you would earn a total of 383.00 from holding Daimler Truck Holding or generate 25.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyster Yale Materials Handling vs. Daimler Truck Holding
Performance |
| Timeline |
| Hyster Yale Materials |
| Daimler Truck Holding |
Hyster Yale and Daimler Truck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyster Yale and Daimler Truck
The main advantage of trading using opposite Hyster Yale and Daimler Truck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyster Yale position performs unexpectedly, Daimler Truck 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 Daimler Truck will offset losses from the drop in Daimler Truck's long position.| Hyster Yale vs. Astec Industries | Hyster Yale vs. Manitex International | Hyster Yale vs. Shyft Group | Hyster Yale vs. Rev Group |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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