Correlation Between Hyster Yale and Yokohama Rubber
Can any of the company-specific risk be diversified away by investing in both Hyster Yale and Yokohama Rubber 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 Yokohama Rubber 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 The Yokohama Rubber, you can compare the effects of market volatilities on Hyster Yale and Yokohama Rubber 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 Yokohama Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyster Yale and Yokohama Rubber.
Diversification Opportunities for Hyster Yale and Yokohama Rubber
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hyster and Yokohama is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Hyster Yale Materials Handling and The Yokohama Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yokohama Rubber 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 Yokohama Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yokohama Rubber has no effect on the direction of Hyster Yale i.e., Hyster Yale and Yokohama Rubber go up and down completely randomly.
Pair Corralation between Hyster Yale and Yokohama Rubber
Assuming the 90 days trading horizon Hyster Yale Materials Handling is expected to generate 1.3 times more return on investment than Yokohama Rubber. However, Hyster Yale is 1.3 times more volatile than The Yokohama Rubber. It trades about -0.03 of its potential returns per unit of risk. The Yokohama Rubber is currently generating about -0.04 per unit of risk. If you would invest 6,556 in Hyster Yale Materials Handling on August 30, 2024 and sell it today you would lose (1,156) from holding Hyster Yale Materials Handling or give up 17.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyster Yale Materials Handling vs. The Yokohama Rubber
Performance |
| Timeline |
| Hyster Yale Materials |
| Yokohama Rubber |
Hyster Yale and Yokohama Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyster Yale and Yokohama Rubber
The main advantage of trading using opposite Hyster Yale and Yokohama Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyster Yale position performs unexpectedly, Yokohama Rubber 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 Yokohama Rubber will offset losses from the drop in Yokohama Rubber's long position.| Hyster Yale vs. United Airlines Holdings | Hyster Yale vs. CARSALESCOM | Hyster Yale vs. STMicroelectronics NV | Hyster Yale vs. UET United Electronic |
| Yokohama Rubber vs. Media and Games | Yokohama Rubber vs. Boyd Gaming | Yokohama Rubber vs. United Insurance Holdings | Yokohama Rubber vs. GigaMedia |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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