Correlation Between Hyster-Yale Materials and China Resources
Can any of the company-specific risk be diversified away by investing in both Hyster-Yale Materials and China Resources 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 China Resources 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 China Resources Beer, you can compare the effects of market volatilities on Hyster-Yale Materials and China Resources 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 China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyster-Yale Materials and China Resources.
Diversification Opportunities for Hyster-Yale Materials and China Resources
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hyster-Yale and China is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Hyster Yale Materials Handling and China Resources Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Beer 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 China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Beer has no effect on the direction of Hyster-Yale Materials i.e., Hyster-Yale Materials and China Resources go up and down completely randomly.
Pair Corralation between Hyster-Yale Materials and China Resources
Assuming the 90 days trading horizon Hyster Yale Materials Handling is expected to under-perform the China Resources. But the stock apears to be less risky and, when comparing its historical volatility, Hyster Yale Materials Handling is 1.59 times less risky than China Resources. The stock trades about -0.03 of its potential returns per unit of risk. The China Resources Beer is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 229.00 in China Resources Beer on August 31, 2024 and sell it today you would earn a total of 97.00 from holding China Resources Beer or generate 42.36% 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. China Resources Beer
Performance |
| Timeline |
| Hyster Yale Materials |
| China Resources Beer |
Hyster-Yale Materials and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyster-Yale Materials and China Resources
The main advantage of trading using opposite Hyster-Yale Materials and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyster-Yale Materials position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| Hyster-Yale Materials vs. Superior Plus Corp | Hyster-Yale Materials vs. NMI Holdings | Hyster-Yale Materials vs. Origin Agritech | Hyster-Yale Materials vs. SIVERS SEMICONDUCTORS AB |
| China Resources vs. MOLSON RS BEVERAGE | China Resources vs. Superior Plus Corp | China Resources vs. NMI Holdings | China Resources vs. Origin Agritech |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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