Correlation Between Agco Corp and Hyster Yale

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Can any of the company-specific risk be diversified away by investing in both Agco Corp 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 Agco Corp and Hyster Yale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agco Corp and Hyster Yale Materials, you can compare the effects of market volatilities on Agco Corp 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 Agco Corp with a short position of Hyster Yale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agco Corp and Hyster Yale.

Diversification Opportunities for Agco Corp and Hyster Yale

0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between Agco Corp and Hyster is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Agco Corp 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 Agco Corp 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 Agco Corp 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 Agco Corp i.e., Agco Corp and Hyster Yale go up and down completely randomly.

Pair Corralation between Agco Corp and Hyster Yale

Given the investment horizon of 90 days Agco Corp is expected to generate 0.83 times more return on investment than Hyster Yale. However, Agco Corp is 1.21 times less risky than Hyster Yale. It trades about 0.03 of its potential returns per unit of risk. Hyster Yale Materials is currently generating about -0.03 per unit of risk. If you would invest  7,784  in Agco Corp on July 2, 2022 and sell it today you would earn a total of  1,936  from holding Agco Corp or generate 24.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Agco Corp  vs.  Hyster Yale Materials Handling

 Performance (%) 
       Timeline  
Agco Corp 
Agco Corp Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Agco Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Agco Corp is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Agco Corp Price Channel

Hyster Yale Materials 
Hyster Performance
0 of 100
Over the last 90 days Hyster Yale Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in October 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Hyster Price Channel

Agco Corp and Hyster Yale Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Agco Corp and Hyster Yale

The main advantage of trading using opposite Agco Corp and Hyster Yale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agco Corp 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.
Agco Corp vs. Amazon Inc
The idea behind Agco Corp and Hyster Yale Materials 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.
Hyster Yale vs. Amazon Inc
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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