Correlation Between Alamo and Hyster Yale

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

Diversification Opportunities for Alamo and Hyster Yale

0.09
  Correlation Coefficient

Significant diversification

The 3 months correlation between Alamo and Hyster is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Alamo Group 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 Alamo 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 Alamo Group 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 Alamo i.e., Alamo and Hyster Yale go up and down completely randomly.

Pair Corralation between Alamo and Hyster Yale

Considering the 90-day investment horizon Alamo Group is expected to generate 0.56 times more return on investment than Hyster Yale. However, Alamo Group is 1.8 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 -0.09 per unit of risk. If you would invest  14,333  in Alamo Group on July 5, 2022 and sell it today you would lose (2,106)  from holding Alamo Group or give up 14.69% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Alamo Group  vs.  Hyster Yale Materials Handling

 Performance (%) 
       Timeline  
Alamo Group 
Alamo Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Alamo Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Alamo is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Alamo 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 November 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Hyster Price Channel

Alamo and Hyster Yale Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Alamo and Hyster Yale

The main advantage of trading using opposite Alamo and Hyster Yale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alamo 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.
Alamo vs. Amazon Inc
The idea behind Alamo Group 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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