Correlation Between PACCAR and Hyster Yale
Can any of the company-specific risk be diversified away by investing in both PACCAR 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 PACCAR and Hyster Yale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PACCAR Inc and Hyster Yale Materials Handling, you can compare the effects of market volatilities on PACCAR 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 PACCAR with a short position of Hyster Yale. Check out your portfolio center. Please also check ongoing floating volatility patterns of PACCAR and Hyster Yale.
Diversification Opportunities for PACCAR and Hyster Yale
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PACCAR and Hyster is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding PACCAR Inc 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 PACCAR 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 PACCAR Inc 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 PACCAR i.e., PACCAR and Hyster Yale go up and down completely randomly.
Pair Corralation between PACCAR and Hyster Yale
Given the investment horizon of 90 days PACCAR Inc is expected to generate 0.45 times more return on investment than Hyster Yale. However, PACCAR Inc is 2.2 times less risky than Hyster Yale. It trades about 0.19 of its potential returns per unit of risk. Hyster Yale Materials Handling is currently generating about 0.04 per unit of risk. If you would invest 6,756 in PACCAR Inc on January 19, 2024 and sell it today you would earn a total of 4,620 from holding PACCAR Inc or generate 68.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PACCAR Inc vs. Hyster Yale Materials Handling
Performance |
| Timeline |
| PACCAR Inc |
| Hyster Yale Materials |
PACCAR and Hyster Yale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PACCAR and Hyster Yale
The main advantage of trading using opposite PACCAR and Hyster Yale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PACCAR 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.| PACCAR vs. Ideanomics | PACCAR vs. American Premium Water | PACCAR vs. Titan International | PACCAR vs. Deere Company |
| Hyster Yale vs. Ideanomics | Hyster Yale vs. American Premium Water | Hyster Yale vs. Titan International | Hyster Yale vs. Deere Company |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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