Correlation Between Wabash National and Hyster Yale
Can any of the company-specific risk be diversified away by investing in both Wabash National 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 Wabash National and Hyster Yale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wabash National and Hyster Yale Materials Handling, you can compare the effects of market volatilities on Wabash National 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 Wabash National with a short position of Hyster Yale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wabash National and Hyster Yale.
Diversification Opportunities for Wabash National and Hyster Yale
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wabash and Hyster is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Wabash National 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 Wabash National 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 Wabash National 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 Wabash National i.e., Wabash National and Hyster Yale go up and down completely randomly.
Pair Corralation between Wabash National and Hyster Yale
Considering the 90-day investment horizon Wabash National is expected to under-perform the Hyster Yale. But the stock apears to be less risky and, when comparing its historical volatility, Wabash National is 1.24 times less risky than Hyster Yale. The stock trades about -0.19 of its potential returns per unit of risk. The Hyster Yale Materials Handling is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 5,925 in Hyster Yale Materials Handling on January 18, 2024 and sell it today you would earn a total of 7.00 from holding Hyster Yale Materials Handling or generate 0.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Wabash National vs. Hyster Yale Materials Handling
Performance |
Timeline |
Wabash National |
Hyster Yale Materials |
Wabash National and Hyster Yale Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wabash National and Hyster Yale
The main advantage of trading using opposite Wabash National and Hyster Yale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wabash National 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.Wabash National vs. Rev Group | Wabash National vs. Gencor Industries | Wabash National vs. Alamo Group | Wabash National vs. Columbus McKinnon |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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