Correlation Between Acme United and Fortress Transp
Can any of the company-specific risk be diversified away by investing in both Acme United and Fortress Transp 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 Acme United and Fortress Transp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acme United and Fortress Transp Infra, you can compare the effects of market volatilities on Acme United and Fortress Transp 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 Acme United with a short position of Fortress Transp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acme United and Fortress Transp.
Diversification Opportunities for Acme United and Fortress Transp
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Acme and Fortress is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Acme United and Fortress Transp Infra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortress Transp Infra and Acme United 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 Acme United are associated (or correlated) with Fortress Transp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortress Transp Infra has no effect on the direction of Acme United i.e., Acme United and Fortress Transp go up and down completely randomly.
Pair Corralation between Acme United and Fortress Transp
Considering the 90-day investment horizon Acme United is expected to generate 1.67 times less return on investment than Fortress Transp. But when comparing it to its historical volatility, Acme United is 1.81 times less risky than Fortress Transp. It trades about 0.26 of its potential returns per unit of risk. Fortress Transp Infra is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 14,224 in Fortress Transp Infra on August 28, 2024 and sell it today you would earn a total of 2,602 from holding Fortress Transp Infra or generate 18.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Acme United vs. Fortress Transp Infra
Performance |
| Timeline |
| Acme United |
| Fortress Transp Infra |
Acme United and Fortress Transp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acme United and Fortress Transp
The main advantage of trading using opposite Acme United and Fortress Transp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acme United position performs unexpectedly, Fortress Transp 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 Fortress Transp will offset losses from the drop in Fortress Transp's long position.| Acme United vs. Mannatech Incorporated | Acme United vs. Inter Parfums | Acme United vs. Nu Skin Enterprises | Acme United vs. Procter Gamble |
| Fortress Transp vs. PROG Holdings | Fortress Transp vs. McGrath RentCorp | Fortress Transp vs. Mega Matrix Corp | Fortress Transp vs. FTAI Aviation Ltd |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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