Correlation Between Hyster Yale and Plastic Omnium
Can any of the company-specific risk be diversified away by investing in both Hyster Yale and Plastic Omnium 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 Plastic Omnium 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 Plastic Omnium, you can compare the effects of market volatilities on Hyster Yale and Plastic Omnium 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 Plastic Omnium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyster Yale and Plastic Omnium.
Diversification Opportunities for Hyster Yale and Plastic Omnium
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hyster and Plastic is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Hyster Yale Materials Handling and Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plastic Omnium 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 Plastic Omnium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plastic Omnium has no effect on the direction of Hyster Yale i.e., Hyster Yale and Plastic Omnium go up and down completely randomly.
Pair Corralation between Hyster Yale and Plastic Omnium
Assuming the 90 days trading horizon Hyster Yale Materials Handling is expected to under-perform the Plastic Omnium. But the stock apears to be less risky and, when comparing its historical volatility, Hyster Yale Materials Handling is 1.08 times less risky than Plastic Omnium. The stock trades about -0.09 of its potential returns per unit of risk. The Plastic Omnium is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 789.00 in Plastic Omnium on September 22, 2024 and sell it today you would earn a total of 188.00 from holding Plastic Omnium or generate 23.83% 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. Plastic Omnium
Performance |
| Timeline |
| Hyster Yale Materials |
| Plastic Omnium |
Hyster Yale and Plastic Omnium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyster Yale and Plastic Omnium
The main advantage of trading using opposite Hyster Yale and Plastic Omnium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyster Yale position performs unexpectedly, Plastic Omnium 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 Plastic Omnium will offset losses from the drop in Plastic Omnium's long position.The idea behind Hyster Yale Materials Handling and Plastic Omnium pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Plastic Omnium vs. OAKTRSPECLENDNEW | Plastic Omnium vs. Webster Financial | Plastic Omnium vs. REVO INSURANCE SPA | Plastic Omnium vs. Magnachip Semiconductor |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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