Correlation Between Altus Group and Martinrea International
Can any of the company-specific risk be diversified away by investing in both Altus Group and Martinrea International 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 Altus Group and Martinrea International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altus Group Limited and Martinrea International, you can compare the effects of market volatilities on Altus Group and Martinrea International 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 Altus Group with a short position of Martinrea International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altus Group and Martinrea International.
Diversification Opportunities for Altus Group and Martinrea International
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Altus and Martinrea is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Altus Group Limited and Martinrea International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martinrea International and Altus Group 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 Altus Group Limited are associated (or correlated) with Martinrea International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martinrea International has no effect on the direction of Altus Group i.e., Altus Group and Martinrea International go up and down completely randomly.
Pair Corralation between Altus Group and Martinrea International
Assuming the 90 days trading horizon Altus Group Limited is expected to generate 0.56 times more return on investment than Martinrea International. However, Altus Group Limited is 1.8 times less risky than Martinrea International. It trades about 0.15 of its potential returns per unit of risk. Martinrea International is currently generating about -0.13 per unit of risk. If you would invest 5,461 in Altus Group Limited on August 28, 2024 and sell it today you would earn a total of 467.00 from holding Altus Group Limited or generate 8.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altus Group Limited vs. Martinrea International
Performance |
| Timeline |
| Altus Group Limited |
| Martinrea International |
Altus Group and Martinrea International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altus Group and Martinrea International
The main advantage of trading using opposite Altus Group and Martinrea International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altus Group position performs unexpectedly, Martinrea International 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 Martinrea International will offset losses from the drop in Martinrea International's long position.| Altus Group vs. Colliers International Group | Altus Group vs. FirstService Corp | Altus Group vs. Winpak | Altus Group vs. Ritchie Bros Auctioneers |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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