Correlation Between Hyster-Yale Materials and ASOS PLC
Can any of the company-specific risk be diversified away by investing in both Hyster-Yale Materials and ASOS PLC 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 ASOS PLC 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 ASOS PLC, you can compare the effects of market volatilities on Hyster-Yale Materials and ASOS PLC 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 ASOS PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyster-Yale Materials and ASOS PLC.
Diversification Opportunities for Hyster-Yale Materials and ASOS PLC
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hyster-Yale and ASOS is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Hyster Yale Materials Handling and ASOS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASOS PLC 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 ASOS PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASOS PLC has no effect on the direction of Hyster-Yale Materials i.e., Hyster-Yale Materials and ASOS PLC go up and down completely randomly.
Pair Corralation between Hyster-Yale Materials and ASOS PLC
Assuming the 90 days trading horizon Hyster Yale Materials Handling is expected to under-perform the ASOS PLC. But the stock apears to be less risky and, when comparing its historical volatility, Hyster Yale Materials Handling is 1.01 times less risky than ASOS PLC. The stock trades about -0.04 of its potential returns per unit of risk. The ASOS PLC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 429.00 in ASOS PLC on September 5, 2024 and sell it today you would earn a total of 13.00 from holding ASOS PLC or generate 3.03% 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. ASOS PLC
Performance |
| Timeline |
| Hyster Yale Materials |
| ASOS PLC |
Hyster-Yale Materials and ASOS PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyster-Yale Materials and ASOS PLC
The main advantage of trading using opposite Hyster-Yale Materials and ASOS PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyster-Yale Materials position performs unexpectedly, ASOS PLC 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 ASOS PLC will offset losses from the drop in ASOS PLC's 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 |
| ASOS PLC vs. Plastic Omnium | ASOS PLC vs. Sumitomo Rubber Industries | ASOS PLC vs. Hyster Yale Materials Handling | ASOS PLC vs. EEDUCATION ALBERT AB |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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