Correlation Between Alamo and Kubota
Can any of the company-specific risk be diversified away by investing in both Alamo and Kubota 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 Alamo and Kubota into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alamo Group and Kubota, you can compare the effects of market volatilities on Alamo and Kubota 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 Alamo with a short position of Kubota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alamo and Kubota.
Diversification Opportunities for Alamo and Kubota
Very good diversification
The 3 months correlation between Alamo and Kubota is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Alamo Group and Kubota in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kubota and Alamo 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 Alamo Group are associated (or correlated) with Kubota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kubota has no effect on the direction of Alamo i.e., Alamo and Kubota go up and down completely randomly.
Pair Corralation between Alamo and Kubota
Considering the 90-day investment horizon Alamo Group is expected to generate 1.21 times more return on investment than Kubota. However, Alamo is 1.21 times more volatile than Kubota. It trades about 0.26 of its potential returns per unit of risk. Kubota is currently generating about -0.1 per unit of risk. If you would invest 17,416 in Alamo Group on August 28, 2024 and sell it today you would earn a total of 2,845 from holding Alamo Group or generate 16.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alamo Group vs. Kubota
Performance |
| Timeline |
| Alamo Group |
| Kubota |
Alamo and Kubota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alamo and Kubota
The main advantage of trading using opposite Alamo and Kubota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alamo position performs unexpectedly, Kubota 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 Kubota will offset losses from the drop in Kubota's long position.| Alamo vs. Lion Electric Corp | Alamo vs. Xos Inc | Alamo vs. Hydrofarm Holdings Group | Alamo vs. AGCO Corporation |
| Kubota vs. Lion Electric Corp | Kubota vs. Nikola Corp | Kubota vs. Buhler Industries | Kubota vs. Toyota Industries |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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