Correlation Between Hyster-Yale Materials and PACCAR
Can any of the company-specific risk be diversified away by investing in both Hyster-Yale Materials and PACCAR 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 PACCAR 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 PACCAR Inc, you can compare the effects of market volatilities on Hyster-Yale Materials and PACCAR 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 PACCAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyster-Yale Materials and PACCAR.
Diversification Opportunities for Hyster-Yale Materials and PACCAR
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyster-Yale and PACCAR is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Hyster Yale Materials Handling and PACCAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACCAR Inc 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 PACCAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACCAR Inc has no effect on the direction of Hyster-Yale Materials i.e., Hyster-Yale Materials and PACCAR go up and down completely randomly.
Pair Corralation between Hyster-Yale Materials and PACCAR
Assuming the 90 days trading horizon Hyster Yale Materials Handling is expected to under-perform the PACCAR. In addition to that, Hyster-Yale Materials is 1.38 times more volatile than PACCAR Inc. It trades about -0.12 of its total potential returns per unit of risk. PACCAR Inc is currently generating about 0.09 per unit of volatility. If you would invest 9,463 in PACCAR Inc on October 15, 2024 and sell it today you would earn a total of 939.00 from holding PACCAR Inc or generate 9.92% 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. PACCAR Inc
Performance |
| Timeline |
| Hyster Yale Materials |
| PACCAR Inc |
Hyster-Yale Materials and PACCAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyster-Yale Materials and PACCAR
The main advantage of trading using opposite Hyster-Yale Materials and PACCAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyster-Yale Materials position performs unexpectedly, PACCAR 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 PACCAR will offset losses from the drop in PACCAR's long position.| Hyster-Yale Materials vs. CHINA EDUCATION GROUP | Hyster-Yale Materials vs. Perdoceo Education | Hyster-Yale Materials vs. Tokyu Construction Co | Hyster-Yale Materials vs. American Public Education |
| PACCAR vs. JAPAN TOBACCO UNSPADR12 | PACCAR vs. CyberArk Software | PACCAR vs. British American Tobacco | PACCAR vs. ASURE SOFTWARE |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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