Correlation Between Shyft and Columbus McKinnon
Can any of the company-specific risk be diversified away by investing in both Shyft and Columbus McKinnon 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 Columbus McKinnon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shyft Group and Columbus McKinnon, you can compare the effects of market volatilities on Shyft and Columbus McKinnon 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 Columbus McKinnon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shyft and Columbus McKinnon.
Diversification Opportunities for Shyft and Columbus McKinnon
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shyft and Columbus is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Shyft Group and Columbus McKinnon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbus McKinnon 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 Columbus McKinnon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbus McKinnon has no effect on the direction of Shyft i.e., Shyft and Columbus McKinnon go up and down completely randomly.
Pair Corralation between Shyft and Columbus McKinnon
Given the investment horizon of 90 days Shyft is expected to generate 2.19 times less return on investment than Columbus McKinnon. But when comparing it to its historical volatility, Shyft Group is 1.03 times less risky than Columbus McKinnon. It trades about 0.14 of its potential returns per unit of risk. Columbus McKinnon is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 3,283 in Columbus McKinnon on August 27, 2024 and sell it today you would earn a total of 570.00 from holding Columbus McKinnon or generate 17.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shyft Group vs. Columbus McKinnon
Performance |
| Timeline |
| Shyft Group |
| Columbus McKinnon |
Shyft and Columbus McKinnon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shyft and Columbus McKinnon
The main advantage of trading using opposite Shyft and Columbus McKinnon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shyft position performs unexpectedly, Columbus McKinnon 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 Columbus McKinnon will offset losses from the drop in Columbus McKinnon's long position.| Shyft vs. Astec Industries | Shyft vs. Hyster Yale Materials Handling | Shyft vs. Manitex International | Shyft vs. Rev Group |
| Columbus McKinnon vs. Xos Inc | Columbus McKinnon vs. Nikola Corp | Columbus McKinnon vs. Wabash National | Columbus McKinnon vs. American Premium Water |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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