Correlation Between Hyster-Yale Materials and IMPERIAL TOBACCO
Can any of the company-specific risk be diversified away by investing in both Hyster-Yale Materials and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO 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 IMPERIAL TOBACCO , you can compare the effects of market volatilities on Hyster-Yale Materials and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyster-Yale Materials and IMPERIAL TOBACCO.
Diversification Opportunities for Hyster-Yale Materials and IMPERIAL TOBACCO
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyster-Yale and IMPERIAL is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Hyster Yale Materials Handling and IMPERIAL TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMPERIAL TOBACCO 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 IMPERIAL TOBACCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMPERIAL TOBACCO has no effect on the direction of Hyster-Yale Materials i.e., Hyster-Yale Materials and IMPERIAL TOBACCO go up and down completely randomly.
Pair Corralation between Hyster-Yale Materials and IMPERIAL TOBACCO
Assuming the 90 days trading horizon Hyster Yale Materials Handling is expected to under-perform the IMPERIAL TOBACCO. In addition to that, Hyster-Yale Materials is 3.52 times more volatile than IMPERIAL TOBACCO . It trades about -0.08 of its total potential returns per unit of risk. IMPERIAL TOBACCO is currently generating about 0.42 per unit of volatility. If you would invest 2,779 in IMPERIAL TOBACCO on September 2, 2024 and sell it today you would earn a total of 300.00 from holding IMPERIAL TOBACCO or generate 10.8% 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. IMPERIAL TOBACCO
Performance |
| Timeline |
| Hyster Yale Materials |
| IMPERIAL TOBACCO |
Hyster-Yale Materials and IMPERIAL TOBACCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyster-Yale Materials and IMPERIAL TOBACCO
The main advantage of trading using opposite Hyster-Yale Materials and IMPERIAL TOBACCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyster-Yale Materials position performs unexpectedly, IMPERIAL TOBACCO 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 IMPERIAL TOBACCO will offset losses from the drop in IMPERIAL TOBACCO's long position.| Hyster-Yale Materials vs. Ming Le Sports | Hyster-Yale Materials vs. Lion One Metals | Hyster-Yale Materials vs. VIAPLAY GROUP AB | Hyster-Yale Materials vs. Cars Inc |
| IMPERIAL TOBACCO vs. SIVERS SEMICONDUCTORS AB | IMPERIAL TOBACCO vs. Darden Restaurants | IMPERIAL TOBACCO vs. Reliance Steel Aluminum | IMPERIAL TOBACCO vs. Q2M Managementberatung AG |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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