Correlation Between Shyft and Oshkosh
Can any of the company-specific risk be diversified away by investing in both Shyft and Oshkosh 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 Oshkosh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shyft Group and Oshkosh, you can compare the effects of market volatilities on Shyft and Oshkosh 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 Oshkosh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shyft and Oshkosh.
Diversification Opportunities for Shyft and Oshkosh
Poor diversification
The 3 months correlation between Shyft and Oshkosh is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Shyft Group and Oshkosh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oshkosh 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 Oshkosh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oshkosh has no effect on the direction of Shyft i.e., Shyft and Oshkosh go up and down completely randomly.
Pair Corralation between Shyft and Oshkosh
Given the investment horizon of 90 days Shyft Group is expected to under-perform the Oshkosh. But the stock apears to be less risky and, when comparing its historical volatility, Shyft Group is 2.28 times less risky than Oshkosh. The stock trades about -0.03 of its potential returns per unit of risk. The Oshkosh is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 9,542 in Oshkosh on November 18, 2024 and sell it today you would earn a total of 1,198 from holding Oshkosh or generate 12.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shyft Group vs. Oshkosh
Performance |
| Timeline |
| Shyft Group |
| Oshkosh |
Shyft and Oshkosh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shyft and Oshkosh
The main advantage of trading using opposite Shyft and Oshkosh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shyft position performs unexpectedly, Oshkosh 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 Oshkosh will offset losses from the drop in Oshkosh's long position.| Shyft vs. Astec Industries | Shyft vs. Hyster Yale Materials Handling | Shyft vs. Rev Group | Shyft vs. Lindsay |
| Oshkosh vs. Terex | Oshkosh vs. Astec Industries | Oshkosh vs. Hyster Yale Materials Handling | Oshkosh vs. Manitowoc |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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