Correlation Between Shyft and Hino Motors
Can any of the company-specific risk be diversified away by investing in both Shyft and Hino Motors 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 Hino Motors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shyft Group and Hino Motors Ltd, you can compare the effects of market volatilities on Shyft and Hino Motors 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 Hino Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shyft and Hino Motors.
Diversification Opportunities for Shyft and Hino Motors
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shyft and Hino is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Shyft Group and Hino Motors Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hino Motors 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 Hino Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hino Motors has no effect on the direction of Shyft i.e., Shyft and Hino Motors go up and down completely randomly.
Pair Corralation between Shyft and Hino Motors
Given the investment horizon of 90 days Shyft Group is expected to generate 1.92 times more return on investment than Hino Motors. However, Shyft is 1.92 times more volatile than Hino Motors Ltd. It trades about -0.01 of its potential returns per unit of risk. Hino Motors Ltd is currently generating about -0.04 per unit of risk. If you would invest 2,427 in Shyft Group on September 3, 2024 and sell it today you would lose (1,017) from holding Shyft Group or give up 41.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shyft Group vs. Hino Motors Ltd
Performance |
| Timeline |
| Shyft Group |
| Hino Motors |
Shyft and Hino Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shyft and Hino Motors
The main advantage of trading using opposite Shyft and Hino Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shyft position performs unexpectedly, Hino Motors 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 Hino Motors will offset losses from the drop in Hino Motors' long position.| Shyft vs. Astec Industries | Shyft vs. Hyster Yale Materials Handling | Shyft vs. Manitex International | Shyft vs. Rev Group |
| Hino Motors vs. Daimler Truck Holding | Hino Motors vs. Volvo AB ADR | Hino Motors vs. Columbus McKinnon | Hino Motors vs. Hyster Yale Materials Handling |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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