Correlation Between Hyster Yale and AVITA Medical
Can any of the company-specific risk be diversified away by investing in both Hyster Yale and AVITA Medical 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 AVITA Medical 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 AVITA Medical, you can compare the effects of market volatilities on Hyster Yale and AVITA Medical 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 AVITA Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyster Yale and AVITA Medical.
Diversification Opportunities for Hyster Yale and AVITA Medical
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyster and AVITA is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hyster Yale Materials Handling and AVITA Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVITA Medical 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 AVITA Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVITA Medical has no effect on the direction of Hyster Yale i.e., Hyster Yale and AVITA Medical go up and down completely randomly.
Pair Corralation between Hyster Yale and AVITA Medical
Assuming the 90 days trading horizon Hyster Yale Materials Handling is expected to under-perform the AVITA Medical. But the stock apears to be less risky and, when comparing its historical volatility, Hyster Yale Materials Handling is 1.74 times less risky than AVITA Medical. The stock trades about -0.25 of its potential returns per unit of risk. The AVITA Medical is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 252.00 in AVITA Medical on September 26, 2024 and sell it today you would lose (26.00) from holding AVITA Medical or give up 10.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyster Yale Materials Handling vs. AVITA Medical
Performance |
| Timeline |
| Hyster Yale Materials |
| AVITA Medical |
Hyster Yale and AVITA Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyster Yale and AVITA Medical
The main advantage of trading using opposite Hyster Yale and AVITA Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyster Yale position performs unexpectedly, AVITA Medical 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 AVITA Medical will offset losses from the drop in AVITA Medical's long position.| Hyster Yale vs. PACCAR Inc | Hyster Yale vs. KION Group AG | Hyster Yale vs. Sinotruk Limited | Hyster Yale vs. Wabash National |
| AVITA Medical vs. BJs Wholesale Club | AVITA Medical vs. Penta Ocean Construction Co | AVITA Medical vs. AEON STORES | AVITA Medical vs. Titan Machinery |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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