Correlation Between ABM Industries and Maximus
Can any of the company-specific risk be diversified away by investing in both ABM Industries and Maximus 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 ABM Industries and Maximus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABM Industries Incorporated and Maximus, you can compare the effects of market volatilities on ABM Industries and Maximus 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 ABM Industries with a short position of Maximus. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABM Industries and Maximus.
Diversification Opportunities for ABM Industries and Maximus
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between ABM and Maximus is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding ABM Industries Incorporated and Maximus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maximus and ABM Industries 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 ABM Industries Incorporated are associated (or correlated) with Maximus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maximus has no effect on the direction of ABM Industries i.e., ABM Industries and Maximus go up and down completely randomly.
Pair Corralation between ABM Industries and Maximus
Considering the 90-day investment horizon ABM Industries Incorporated is expected to generate 0.61 times more return on investment than Maximus. However, ABM Industries Incorporated is 1.64 times less risky than Maximus. It trades about 0.18 of its potential returns per unit of risk. Maximus is currently generating about -0.3 per unit of risk. If you would invest 5,371 in ABM Industries Incorporated on August 27, 2024 and sell it today you would earn a total of 308.00 from holding ABM Industries Incorporated or generate 5.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABM Industries Incorporated vs. Maximus
Performance |
| Timeline |
| ABM Industries |
| Maximus |
ABM Industries and Maximus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABM Industries and Maximus
The main advantage of trading using opposite ABM Industries and Maximus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABM Industries position performs unexpectedly, Maximus 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 Maximus will offset losses from the drop in Maximus' long position.| ABM Industries vs. Genpact Limited | ABM Industries vs. Broadridge Financial Solutions | ABM Industries vs. First Advantage Corp | ABM Industries vs. Franklin Covey |
| Maximus vs. Oneconnect Financial Technology | Maximus vs. Global Business Travel | Maximus vs. Alight Inc | Maximus vs. CS Disco LLC |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |