Correlation Between Hyster-Yale Materials and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both Hyster-Yale Materials and Martin Marietta 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 Martin Marietta 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 Martin Marietta Materials, you can compare the effects of market volatilities on Hyster-Yale Materials and Martin Marietta 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 Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyster-Yale Materials and Martin Marietta.
Diversification Opportunities for Hyster-Yale Materials and Martin Marietta
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hyster-Yale and Martin is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Hyster Yale Materials Handling and Martin Marietta Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martin Marietta Materials 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 Martin Marietta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martin Marietta Materials has no effect on the direction of Hyster-Yale Materials i.e., Hyster-Yale Materials and Martin Marietta go up and down completely randomly.
Pair Corralation between Hyster-Yale Materials and Martin Marietta
Assuming the 90 days trading horizon Hyster Yale Materials Handling is expected to generate 2.14 times more return on investment than Martin Marietta. However, Hyster-Yale Materials is 2.14 times more volatile than Martin Marietta Materials. It trades about 0.05 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about 0.08 per unit of risk. If you would invest 2,719 in Hyster Yale Materials Handling on August 26, 2024 and sell it today you would earn a total of 2,331 from holding Hyster Yale Materials Handling or generate 85.73% 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. Martin Marietta Materials
Performance |
| Timeline |
| Hyster Yale Materials |
| Martin Marietta Materials |
Hyster-Yale Materials and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyster-Yale Materials and Martin Marietta
The main advantage of trading using opposite Hyster-Yale Materials and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyster-Yale Materials position performs unexpectedly, Martin Marietta 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 Martin Marietta will offset losses from the drop in Martin Marietta's long position.| Hyster-Yale Materials vs. Perdoceo Education | Hyster-Yale Materials vs. MONEYSUPERMARKET | Hyster-Yale Materials vs. Performance Food Group | Hyster-Yale Materials vs. Laureate Education |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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