Correlation Between COSTAR GROUP and Hyster-Yale Materials
Can any of the company-specific risk be diversified away by investing in both COSTAR GROUP 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 COSTAR GROUP 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 COSTAR GROUP INC and Hyster Yale Materials Handling, you can compare the effects of market volatilities on COSTAR GROUP 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 COSTAR GROUP with a short position of Hyster-Yale Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSTAR GROUP and Hyster-Yale Materials.
Diversification Opportunities for COSTAR GROUP and Hyster-Yale Materials
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COSTAR and Hyster-Yale is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding COSTAR GROUP INC 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 COSTAR GROUP 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 COSTAR GROUP INC 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 COSTAR GROUP i.e., COSTAR GROUP and Hyster-Yale Materials go up and down completely randomly.
Pair Corralation between COSTAR GROUP and Hyster-Yale Materials
Assuming the 90 days horizon COSTAR GROUP INC is expected to generate 0.59 times more return on investment than Hyster-Yale Materials. However, COSTAR GROUP INC is 1.71 times less risky than Hyster-Yale Materials. It trades about 0.22 of its potential returns per unit of risk. Hyster Yale Materials Handling is currently generating about -0.12 per unit of risk. If you would invest 6,831 in COSTAR GROUP INC on August 29, 2024 and sell it today you would earn a total of 783.00 from holding COSTAR GROUP INC or generate 11.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COSTAR GROUP INC vs. Hyster Yale Materials Handling
Performance |
| Timeline |
| COSTAR GROUP INC |
| Hyster Yale Materials |
COSTAR GROUP and Hyster-Yale Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSTAR GROUP and Hyster-Yale Materials
The main advantage of trading using opposite COSTAR GROUP and Hyster-Yale Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSTAR GROUP 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.The idea behind COSTAR GROUP INC and Hyster Yale Materials Handling pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hyster-Yale Materials vs. KION Group AG | Hyster-Yale Materials vs. Superior Plus Corp | Hyster-Yale Materials vs. NMI Holdings | Hyster-Yale Materials vs. Origin Agritech |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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