Correlation Between Hyster Yale and Eagle Materials
Can any of the company-specific risk be diversified away by investing in both Hyster Yale and Eagle Materials 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 Eagle Materials 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 Eagle Materials, you can compare the effects of market volatilities on Hyster Yale and Eagle Materials 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 Eagle Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyster Yale and Eagle Materials.
Diversification Opportunities for Hyster Yale and Eagle Materials
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hyster and Eagle is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hyster Yale Materials Handling and Eagle Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Materials 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 Eagle Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Materials has no effect on the direction of Hyster Yale i.e., Hyster Yale and Eagle Materials go up and down completely randomly.
Pair Corralation between Hyster Yale and Eagle Materials
Assuming the 90 days trading horizon Hyster Yale Materials Handling is expected to under-perform the Eagle Materials. In addition to that, Hyster Yale is 2.02 times more volatile than Eagle Materials. It trades about -0.11 of its total potential returns per unit of risk. Eagle Materials is currently generating about 0.31 per unit of volatility. If you would invest 25,800 in Eagle Materials on August 30, 2024 and sell it today you would earn a total of 3,600 from holding Eagle Materials or generate 13.95% 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. Eagle Materials
Performance |
| Timeline |
| Hyster Yale Materials |
| Eagle Materials |
Hyster Yale and Eagle Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyster Yale and Eagle Materials
The main advantage of trading using opposite Hyster Yale and Eagle Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyster Yale position performs unexpectedly, Eagle Materials 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 Eagle Materials will offset losses from the drop in Eagle Materials' long position.| Hyster Yale vs. United Airlines Holdings | Hyster Yale vs. CARSALESCOM | Hyster Yale vs. STMicroelectronics NV | Hyster Yale vs. UET United Electronic |
| Eagle Materials vs. Daikin IndustriesLtd | Eagle Materials vs. Anhui Conch Cement | Eagle Materials vs. Superior Plus Corp | Eagle Materials vs. NMI Holdings |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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