Correlation Between Astec Inds and Hyster Yale

By analyzing existing cross correlation between Astec Inds and Hyster Yale Materials, you can compare the effects of market volatilities on Astec Inds and Hyster Yale 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 Astec Inds with a short position of Hyster Yale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astec Inds and Hyster Yale.

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Can any of the company-specific risk be diversified away by investing in both Astec Inds and Hyster Yale 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 Astec Inds and Hyster Yale into the same portfolio, which is an essential part of the fundamental portfolio management process.

Diversification Opportunities for Astec Inds and Hyster Yale

-0.59
  Correlation Coefficient
Astec Inds
Hyster Yale Materials

Excellent diversification

The 3 months correlation between Astec and Hyster is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Astec Inds 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 Astec Inds 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 Astec Inds are associated (or correlated) with Hyster Yale. 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 Astec Inds i.e., Astec Inds and Hyster Yale go up and down completely randomly.

Pair Corralation between Astec Inds and Hyster Yale

Given the investment horizon of 90 days Astec Inds is expected to generate 2.65 times less return on investment than Hyster Yale. But when comparing it to its historical volatility, Astec Inds is 1.54 times less risky than Hyster Yale. It trades about 0.08 of its potential returns per unit of risk. Hyster Yale Materials is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  4,142  in Hyster Yale Materials on October 18, 2021 and sell it today you would earn a total of  341.00  from holding Hyster Yale Materials or generate 8.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Astec Inds  vs.  Hyster Yale Materials Handling

 Performance (%) 
      Timeline 
Astec Inds 
Astec Performance
14 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Astec Inds are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather sluggish basic indicators, Astec Inds exhibited solid returns over the last few months and may actually be approaching a breakup point.

Astec Price Channel

Hyster Yale Materials 
Hyster Performance
0 of 100
Over the last 90 days Hyster Yale Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Hyster Yale is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Hyster Price Channel

Astec Inds and Hyster Yale Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Astec Inds and Hyster Yale

The main advantage of trading using opposite Astec Inds and Hyster Yale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astec Inds position performs unexpectedly, Hyster Yale 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 will offset losses from the drop in Hyster Yale's long position.
The idea behind Astec Inds and Hyster Yale Materials 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.
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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