Correlation Between Ag Growth and Alamo
Can any of the company-specific risk be diversified away by investing in both Ag Growth and Alamo 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 Ag Growth and Alamo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ag Growth International and Alamo Group, you can compare the effects of market volatilities on Ag Growth and Alamo 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 Ag Growth with a short position of Alamo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ag Growth and Alamo.
Diversification Opportunities for Ag Growth and Alamo
Good diversification
The 3 months correlation between AGGZF and Alamo is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ag Growth International and Alamo Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamo Group and Ag Growth 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 Ag Growth International are associated (or correlated) with Alamo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alamo Group has no effect on the direction of Ag Growth i.e., Ag Growth and Alamo go up and down completely randomly.
Pair Corralation between Ag Growth and Alamo
Assuming the 90 days horizon Ag Growth International is expected to under-perform the Alamo. In addition to that, Ag Growth is 1.49 times more volatile than Alamo Group. It trades about -0.01 of its total potential returns per unit of risk. Alamo Group is currently generating about 0.02 per unit of volatility. If you would invest 18,051 in Alamo Group on August 30, 2024 and sell it today you would earn a total of 1,738 from holding Alamo Group or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 68.78% |
| Values | Daily Returns |
Ag Growth International vs. Alamo Group
Performance |
| Timeline |
| Ag Growth International |
| Alamo Group |
Ag Growth and Alamo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ag Growth and Alamo
The main advantage of trading using opposite Ag Growth and Alamo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ag Growth position performs unexpectedly, Alamo 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 Alamo will offset losses from the drop in Alamo's long position.| Ag Growth vs. Deere Company | Ag Growth vs. Columbus McKinnon | Ag Growth vs. Hyster Yale Materials Handling | Ag Growth vs. Manitowoc |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |