Correlation Between Alamo and Oshkosh
Can any of the company-specific risk be diversified away by investing in both Alamo and Oshkosh 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 Oshkosh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alamo Group and Oshkosh, you can compare the effects of market volatilities on Alamo and Oshkosh 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 Oshkosh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alamo and Oshkosh.
Diversification Opportunities for Alamo and Oshkosh
Very weak diversification
The 3 months correlation between Alamo and Oshkosh is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Alamo Group and Oshkosh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oshkosh 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 Oshkosh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oshkosh has no effect on the direction of Alamo i.e., Alamo and Oshkosh go up and down completely randomly.
Pair Corralation between Alamo and Oshkosh
Considering the 90-day investment horizon Alamo is expected to generate 10.76 times less return on investment than Oshkosh. But when comparing it to its historical volatility, Alamo Group is 3.02 times less risky than Oshkosh. It trades about 0.06 of its potential returns per unit of risk. Oshkosh is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 9,507 in Oshkosh on November 1, 2024 and sell it today you would earn a total of 1,819 from holding Oshkosh or generate 19.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alamo Group vs. Oshkosh
Performance |
| Timeline |
| Alamo Group |
| Oshkosh |
Alamo and Oshkosh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alamo and Oshkosh
The main advantage of trading using opposite Alamo and Oshkosh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alamo position performs unexpectedly, Oshkosh 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 Oshkosh will offset losses from the drop in Oshkosh's long position.| Alamo vs. Hyster Yale Materials Handling | Alamo vs. Columbus McKinnon | Alamo vs. AGCO Corporation | Alamo vs. Titan International |
| Oshkosh vs. Terex | Oshkosh vs. Astec Industries | Oshkosh vs. Hyster Yale Materials Handling | Oshkosh 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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