Correlation Between Hyster Yale and Materialise
Can any of the company-specific risk be diversified away by investing in both Hyster Yale and Materialise 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 Materialise 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 Materialise NV, you can compare the effects of market volatilities on Hyster Yale and Materialise 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 Materialise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyster Yale and Materialise.
Diversification Opportunities for Hyster Yale and Materialise
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hyster and Materialise is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Hyster Yale Materials Handling and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV 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 Materialise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materialise NV has no effect on the direction of Hyster Yale i.e., Hyster Yale and Materialise go up and down completely randomly.
Pair Corralation between Hyster Yale and Materialise
Assuming the 90 days trading horizon Hyster Yale Materials Handling is expected to generate 0.77 times more return on investment than Materialise. However, Hyster Yale Materials Handling is 1.31 times less risky than Materialise. It trades about 0.04 of its potential returns per unit of risk. Materialise NV is currently generating about 0.02 per unit of risk. If you would invest 3,858 in Hyster Yale Materials Handling on November 28, 2024 and sell it today you would earn a total of 1,192 from holding Hyster Yale Materials Handling or generate 30.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyster Yale Materials Handling vs. Materialise NV
Performance |
| Timeline |
| Hyster Yale Materials |
| Materialise NV |
Hyster Yale and Materialise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyster Yale and Materialise
The main advantage of trading using opposite Hyster Yale and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyster Yale position performs unexpectedly, Materialise 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 Materialise will offset losses from the drop in Materialise's long position.| Hyster Yale vs. American Airlines Group | Hyster Yale vs. China Southern Airlines | Hyster Yale vs. Aegean Airlines SA | Hyster Yale vs. CVR Medical Corp |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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