Correlation Between Hyster-Yale Materials and Essex Property
Can any of the company-specific risk be diversified away by investing in both Hyster-Yale Materials and Essex Property 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 Materials and Essex Property 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 Essex Property Trust, you can compare the effects of market volatilities on Hyster-Yale Materials and Essex Property 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 Materials with a short position of Essex Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyster-Yale Materials and Essex Property.
Diversification Opportunities for Hyster-Yale Materials and Essex Property
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hyster-Yale and Essex is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hyster Yale Materials Handling and Essex Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essex Property Trust and Hyster-Yale Materials 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 Essex Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Essex Property Trust has no effect on the direction of Hyster-Yale Materials i.e., Hyster-Yale Materials and Essex Property go up and down completely randomly.
Pair Corralation between Hyster-Yale Materials and Essex Property
Assuming the 90 days trading horizon Hyster Yale Materials Handling is expected to under-perform the Essex Property. In addition to that, Hyster-Yale Materials is 1.59 times more volatile than Essex Property Trust. It trades about -0.08 of its total potential returns per unit of risk. Essex Property Trust is currently generating about 0.06 per unit of volatility. If you would invest 26,737 in Essex Property Trust on December 28, 2024 and sell it today you would earn a total of 1,403 from holding Essex Property Trust or generate 5.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hyster Yale Materials Handling vs. Essex Property Trust
Performance |
Timeline |
Hyster Yale Materials |
Essex Property Trust |
Hyster-Yale Materials and Essex Property Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hyster-Yale Materials and Essex Property
The main advantage of trading using opposite Hyster-Yale Materials and Essex Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyster-Yale Materials position performs unexpectedly, Essex Property 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 Essex Property will offset losses from the drop in Essex Property's long position.Hyster-Yale Materials vs. MSAD INSURANCE | Hyster-Yale Materials vs. PANIN INSURANCE | Hyster-Yale Materials vs. JD SPORTS FASH | Hyster-Yale Materials vs. SBI Insurance Group |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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