Correlation Between Shyft and Lindsay

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

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

Diversification Opportunities for Shyft and Lindsay

0.63

Correlation Coefficient

Shyft  Lindsay

Poor diversification

The 3 months correlation between Shyft and Lindsay is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Shyft Group and Lindsay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindsay and Shyft 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 Shyft Group are associated (or correlated) with Lindsay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindsay has no effect on the direction of Shyft i.e., Shyft and Lindsay go up and down completely randomly.

Pair Corralation between Shyft and Lindsay

Given the investment horizon of 90 days Shyft is expected to generate 1.3 times less return on investment than Lindsay. In addition to that, Shyft is 1.03 times more volatile than Lindsay. It trades about 0.15 of its total potential returns per unit of risk. Lindsay is currently generating about 0.2 per unit of volatility. If you would invest  11,832  in Lindsay on August 31, 2024 and sell it today you would earn a total of  1,330  from holding Lindsay or generate 11.24% return on investment over 90 days.

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

Shyft Group  vs.  Lindsay

Shyft Group

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Shyft Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Shyft may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Lindsay

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lindsay are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Lindsay may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Shyft and Lindsay

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

The idea behind Shyft Group and Lindsay 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 the Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.