Correlation Between Hyster-Yale Materials and Parkson Retail
Can any of the company-specific risk be diversified away by investing in both Hyster-Yale Materials and Parkson Retail 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 Parkson Retail 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 Parkson Retail Group, you can compare the effects of market volatilities on Hyster-Yale Materials and Parkson Retail 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 Parkson Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyster-Yale Materials and Parkson Retail.
Diversification Opportunities for Hyster-Yale Materials and Parkson Retail
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hyster-Yale and Parkson is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Hyster Yale Materials Handling and Parkson Retail Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parkson Retail Group 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 Parkson Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parkson Retail Group has no effect on the direction of Hyster-Yale Materials i.e., Hyster-Yale Materials and Parkson Retail go up and down completely randomly.
Pair Corralation between Hyster-Yale Materials and Parkson Retail
Assuming the 90 days trading horizon Hyster Yale Materials Handling is expected to under-perform the Parkson Retail. But the stock apears to be less risky and, when comparing its historical volatility, Hyster Yale Materials Handling is 2.57 times less risky than Parkson Retail. The stock trades about -0.08 of its potential returns per unit of risk. The Parkson Retail Group is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 0.95 in Parkson Retail Group on September 2, 2024 and sell it today you would lose (0.15) from holding Parkson Retail Group or give up 15.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyster Yale Materials Handling vs. Parkson Retail Group
Performance |
| Timeline |
| Hyster Yale Materials |
| Parkson Retail Group |
Hyster-Yale Materials and Parkson Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyster-Yale Materials and Parkson Retail
The main advantage of trading using opposite Hyster-Yale Materials and Parkson Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyster-Yale Materials position performs unexpectedly, Parkson Retail 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 Parkson Retail will offset losses from the drop in Parkson Retail'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 |
| Parkson Retail vs. Dillards | Parkson Retail vs. RYOHIN UNSPADR1 | Parkson Retail vs. Superior Plus Corp | Parkson Retail 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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