Correlation Between Hyster Yale and Insulet
Can any of the company-specific risk be diversified away by investing in both Hyster Yale and Insulet 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 Insulet 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 Insulet, you can compare the effects of market volatilities on Hyster Yale and Insulet 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 Insulet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyster Yale and Insulet.
Diversification Opportunities for Hyster Yale and Insulet
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyster and Insulet is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hyster Yale Materials Handling and Insulet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insulet 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 Insulet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insulet has no effect on the direction of Hyster Yale i.e., Hyster Yale and Insulet go up and down completely randomly.
Pair Corralation between Hyster Yale and Insulet
Assuming the 90 days trading horizon Hyster Yale Materials Handling is expected to generate 1.4 times more return on investment than Insulet. However, Hyster Yale is 1.4 times more volatile than Insulet. It trades about 0.15 of its potential returns per unit of risk. Insulet is currently generating about 0.14 per unit of risk. If you would invest 4,868 in Hyster Yale Materials Handling on September 14, 2024 and sell it today you would earn a total of 282.00 from holding Hyster Yale Materials Handling or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyster Yale Materials Handling vs. Insulet
Performance |
| Timeline |
| Hyster Yale Materials |
| Insulet |
Hyster Yale and Insulet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyster Yale and Insulet
The main advantage of trading using opposite Hyster Yale and Insulet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyster Yale position performs unexpectedly, Insulet 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 Insulet will offset losses from the drop in Insulet's long position.The idea behind Hyster Yale Materials Handling and Insulet 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.| Insulet vs. Taiwan Semiconductor Manufacturing | Insulet vs. EVS Broadcast Equipment | Insulet vs. ON SEMICONDUCTOR | Insulet vs. Air Transport Services |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |