Correlation Between Manitowoc and Hyster Yale

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

Diversification Opportunities for Manitowoc and Hyster Yale

0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Manitowoc and Hyster is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Manitowoc 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 Manitowoc 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 Manitowoc 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 Manitowoc i.e., Manitowoc and Hyster Yale go up and down completely randomly.

Pair Corralation between Manitowoc and Hyster Yale

Considering the 90-day investment horizon Manitowoc is expected to generate 1.15 times more return on investment than Hyster Yale. However, Manitowoc is 1.15 times more volatile than Hyster Yale Materials. It trades about 0.02 of its potential returns per unit of risk. Hyster Yale Materials is currently generating about 0.0 per unit of risk. If you would invest  990.00  in Manitowoc on May 12, 2022 and sell it today you would earn a total of  126.00  from holding Manitowoc or generate 12.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Manitowoc  vs.  Hyster Yale Materials Handling

 Performance (%) 
       Timeline  
Manitowoc 
Manitowoc Performance
0 of 100
Over the last 90 days Manitowoc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Manitowoc is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Manitowoc 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 fairly strong basic indicators, Hyster Yale is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Hyster Price Channel

Manitowoc and Hyster Yale Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Manitowoc and Hyster Yale

The main advantage of trading using opposite Manitowoc and Hyster Yale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manitowoc 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.
The idea behind Manitowoc 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.
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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