Correlation Between Hyster-Yale Materials and Macquarie Group
Can any of the company-specific risk be diversified away by investing in both Hyster-Yale Materials and Macquarie Group 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 Materials and Macquarie Group 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 Macquarie Group Limited, you can compare the effects of market volatilities on Hyster-Yale Materials and Macquarie Group 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 Materials with a short position of Macquarie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyster-Yale Materials and Macquarie Group.
Diversification Opportunities for Hyster-Yale Materials and Macquarie Group
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hyster-Yale and Macquarie is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Hyster Yale Materials Handling and Macquarie Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group and Hyster-Yale Materials 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 Macquarie Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Group has no effect on the direction of Hyster-Yale Materials i.e., Hyster-Yale Materials and Macquarie Group go up and down completely randomly.
Pair Corralation between Hyster-Yale Materials and Macquarie Group
Assuming the 90 days trading horizon Hyster Yale Materials Handling is expected to generate 1.65 times more return on investment than Macquarie Group. However, Hyster-Yale Materials is 1.65 times more volatile than Macquarie Group Limited. It trades about 0.02 of its potential returns per unit of risk. Macquarie Group Limited is currently generating about -0.06 per unit of risk. If you would invest 4,888 in Hyster Yale Materials Handling on October 16, 2024 and sell it today you would earn a total of 52.00 from holding Hyster Yale Materials Handling or generate 1.06% 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. Macquarie Group Limited
Performance |
| Timeline |
| Hyster Yale Materials |
| Macquarie Group |
Hyster-Yale Materials and Macquarie Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyster-Yale Materials and Macquarie Group
The main advantage of trading using opposite Hyster-Yale Materials and Macquarie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyster-Yale Materials position performs unexpectedly, Macquarie Group 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 Macquarie Group will offset losses from the drop in Macquarie Group's long position.| Hyster-Yale Materials vs. Astral Foods Limited | Hyster-Yale Materials vs. ETFS Coffee ETC | Hyster-Yale Materials vs. Austevoll Seafood ASA | Hyster-Yale Materials vs. Tyson Foods |
| Macquarie Group vs. INSURANCE AUST GRP | Macquarie Group vs. Hyster Yale Materials Handling | Macquarie Group vs. Goodyear Tire Rubber | Macquarie Group vs. Summit Materials |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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