Correlation Between Minor International and HE Equipment
Can any of the company-specific risk be diversified away by investing in both Minor International and HE Equipment 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 Minor International and HE Equipment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minor International PCL and HE Equipment Services, you can compare the effects of market volatilities on Minor International and HE Equipment 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 Minor International with a short position of HE Equipment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minor International and HE Equipment.
Diversification Opportunities for Minor International and HE Equipment
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Minor and HEES is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Minor International PCL and HE Equipment Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HE Equipment Services and Minor International 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 Minor International PCL are associated (or correlated) with HE Equipment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HE Equipment Services has no effect on the direction of Minor International i.e., Minor International and HE Equipment go up and down completely randomly.
Pair Corralation between Minor International and HE Equipment
Assuming the 90 days horizon Minor International PCL is expected to under-perform the HE Equipment. But the pink sheet apears to be less risky and, when comparing its historical volatility, Minor International PCL is 1.66 times less risky than HE Equipment. The pink sheet trades about -0.01 of its potential returns per unit of risk. The HE Equipment Services is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,471 in HE Equipment Services on September 14, 2024 and sell it today you would earn a total of 1,095 from holding HE Equipment Services or generate 24.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 58.36% |
| Values | Daily Returns |
Minor International PCL vs. HE Equipment Services
Performance |
| Timeline |
| Minor International PCL |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| HE Equipment Services |
Minor International and HE Equipment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minor International and HE Equipment
The main advantage of trading using opposite Minor International and HE Equipment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minor International position performs unexpectedly, HE Equipment 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 HE Equipment will offset losses from the drop in HE Equipment's long position.| Minor International vs. Alaska Air Group | Minor International vs. American Airlines Group | Minor International vs. Southwest Airlines | Minor International vs. Delta Air Lines |
| HE Equipment vs. McGrath RentCorp | HE Equipment vs. Custom Truck One | HE Equipment vs. Herc Holdings | HE Equipment vs. Alta Equipment Group |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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