Correlation Between National Bank and Hyster-Yale Materials
Can any of the company-specific risk be diversified away by investing in both National Bank and Hyster-Yale Materials 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 National Bank and Hyster-Yale Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank Holdings and Hyster Yale Materials Handling, you can compare the effects of market volatilities on National Bank and Hyster-Yale Materials 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 National Bank with a short position of Hyster-Yale Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Hyster-Yale Materials.
Diversification Opportunities for National Bank and Hyster-Yale Materials
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Hyster-Yale is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding National Bank Holdings and Hyster Yale Materials Handling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyster Yale Materials and National Bank 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 National Bank Holdings are associated (or correlated) with Hyster-Yale Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyster Yale Materials has no effect on the direction of National Bank i.e., National Bank and Hyster-Yale Materials go up and down completely randomly.
Pair Corralation between National Bank and Hyster-Yale Materials
Assuming the 90 days horizon National Bank Holdings is expected to generate 0.81 times more return on investment than Hyster-Yale Materials. However, National Bank Holdings is 1.23 times less risky than Hyster-Yale Materials. It trades about 0.17 of its potential returns per unit of risk. Hyster Yale Materials Handling is currently generating about -0.13 per unit of risk. If you would invest 4,020 in National Bank Holdings on August 27, 2024 and sell it today you would earn a total of 460.00 from holding National Bank Holdings or generate 11.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank Holdings vs. Hyster Yale Materials Handling
Performance |
| Timeline |
| National Bank Holdings |
| Hyster Yale Materials |
National Bank and Hyster-Yale Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Hyster-Yale Materials
The main advantage of trading using opposite National Bank and Hyster-Yale Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Hyster-Yale Materials 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 Hyster-Yale Materials will offset losses from the drop in Hyster-Yale Materials' long position.| National Bank vs. Superior Plus Corp | National Bank vs. NMI Holdings | National Bank vs. Origin Agritech | National Bank vs. SIVERS SEMICONDUCTORS AB |
| Hyster-Yale Materials vs. ZURICH INSURANCE GROUP | Hyster-Yale Materials vs. National Bank Holdings | Hyster-Yale Materials vs. LIFENET INSURANCE CO | Hyster-Yale Materials vs. Regions Financial |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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