Correlation Between Shyft and AGCO
Can any of the company-specific risk be diversified away by investing in both Shyft and AGCO 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 Shyft and AGCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shyft Group and AGCO Corporation, you can compare the effects of market volatilities on Shyft and AGCO 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 Shyft with a short position of AGCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shyft and AGCO.
Diversification Opportunities for Shyft and AGCO
Very good diversification
The 3 months correlation between Shyft and AGCO is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Shyft Group and AGCO Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGCO and Shyft 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 Shyft Group are associated (or correlated) with AGCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGCO has no effect on the direction of Shyft i.e., Shyft and AGCO go up and down completely randomly.
Pair Corralation between Shyft and AGCO
Given the investment horizon of 90 days Shyft Group is expected to under-perform the AGCO. In addition to that, Shyft is 2.1 times more volatile than AGCO Corporation. It trades about -0.02 of its total potential returns per unit of risk. AGCO Corporation is currently generating about -0.02 per unit of volatility. If you would invest 11,688 in AGCO Corporation on August 27, 2024 and sell it today you would lose (1,845) from holding AGCO Corporation or give up 15.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shyft Group vs. AGCO Corp.
Performance |
| Timeline |
| Shyft Group |
| AGCO |
Shyft and AGCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shyft and AGCO
The main advantage of trading using opposite Shyft and AGCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shyft position performs unexpectedly, AGCO 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 AGCO will offset losses from the drop in AGCO's long position.| Shyft vs. Astec Industries | Shyft vs. Hyster Yale Materials Handling | Shyft vs. Manitex International | Shyft vs. Rev 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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