Correlation Between Hyster Yale and IMPERIAL TOBACCO
Can any of the company-specific risk be diversified away by investing in both Hyster Yale and IMPERIAL TOBACCO 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 Hyster Yale and IMPERIAL TOBACCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyster Yale Materials Handling and IMPERIAL TOBACCO , you can compare the effects of market volatilities on Hyster Yale and IMPERIAL TOBACCO 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 Hyster Yale with a short position of IMPERIAL TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyster Yale and IMPERIAL TOBACCO.
Diversification Opportunities for Hyster Yale and IMPERIAL TOBACCO
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyster and IMPERIAL is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hyster Yale Materials Handling and IMPERIAL TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMPERIAL TOBACCO and Hyster Yale 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 Hyster Yale Materials Handling are associated (or correlated) with IMPERIAL TOBACCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMPERIAL TOBACCO has no effect on the direction of Hyster Yale i.e., Hyster Yale and IMPERIAL TOBACCO go up and down completely randomly.
Pair Corralation between Hyster Yale and IMPERIAL TOBACCO
Assuming the 90 days trading horizon Hyster Yale is expected to generate 5.22 times less return on investment than IMPERIAL TOBACCO. In addition to that, Hyster Yale is 2.24 times more volatile than IMPERIAL TOBACCO . It trades about 0.01 of its total potential returns per unit of risk. IMPERIAL TOBACCO is currently generating about 0.09 per unit of volatility. If you would invest 2,508 in IMPERIAL TOBACCO on June 24, 2024 and sell it today you would earn a total of 57.00 from holding IMPERIAL TOBACCO or generate 2.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hyster Yale Materials Handling vs. IMPERIAL TOBACCO
Performance |
Timeline |
Hyster Yale Materials |
IMPERIAL TOBACCO |
Hyster Yale and IMPERIAL TOBACCO Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hyster Yale and IMPERIAL TOBACCO
The main advantage of trading using opposite Hyster Yale and IMPERIAL TOBACCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyster Yale position performs unexpectedly, IMPERIAL TOBACCO 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 IMPERIAL TOBACCO will offset losses from the drop in IMPERIAL TOBACCO's long position.Hyster Yale vs. Superior Plus Corp | Hyster Yale vs. NMI Holdings | Hyster Yale vs. SIVERS SEMICONDUCTORS AB | Hyster Yale vs. NorAm Drilling AS |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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