Correlation Between Hyster Yale and Phillips

Can any of the company-specific risk be diversified away by investing in both Hyster Yale and Phillips 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 Phillips 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 Phillips 66, you can compare the effects of market volatilities on Hyster Yale and Phillips 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 Phillips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyster Yale and Phillips.

Diversification Opportunities for Hyster Yale and Phillips

0.13

Correlation Coefficient

Hyster Yale  Phillips

Average diversification

The 3 months correlation between Hyster and Phillips is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hyster Yale Materials Handling and Phillips 66 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phillips 66 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 Phillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phillips 66 has no effect on the direction of Hyster Yale i.e., Hyster Yale and Phillips go up and down completely randomly.

Pair Corralation between Hyster Yale and Phillips

Assuming the 90 days trading horizon Hyster Yale Materials Handling is expected to generate 1.02 times more return on investment than Phillips. However, Hyster Yale is 1.02 times more volatile than Phillips 66. It trades about -0.29 of its potential returns per unit of risk. Phillips 66 is currently generating about -0.47 per unit of risk. If you would invest  5,365  in Hyster Yale Materials Handling on September 27, 2024 and sell it today you would lose (585.00) from holding Hyster Yale Materials Handling or give up 10.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Hyster Yale Materials Handling  vs.  Phillips 66

Hyster Yale Materials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hyster Yale Materials Handling has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Phillips 66

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Phillips 66 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Hyster Yale and Phillips

The main advantage of trading using opposite Hyster Yale and Phillips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyster Yale position performs unexpectedly, Phillips 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 Phillips will offset losses from the drop in Phillips' long position.

The idea behind Hyster Yale Materials Handling and Phillips 66 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.