Correlation Between Alamo and Shyft
Can any of the company-specific risk be diversified away by investing in both Alamo and Shyft 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 Shyft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alamo Group and Shyft Group, you can compare the effects of market volatilities on Alamo and Shyft 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 Shyft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alamo and Shyft.
Diversification Opportunities for Alamo and Shyft
Very poor diversification
The 3 months correlation between Alamo and Shyft is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Alamo Group and Shyft Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shyft Group 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 Shyft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shyft Group has no effect on the direction of Alamo i.e., Alamo and Shyft go up and down completely randomly.
Pair Corralation between Alamo and Shyft
Considering the 90-day investment horizon Alamo Group is expected to generate 0.6 times more return on investment than Shyft. However, Alamo Group is 1.68 times less risky than Shyft. It trades about 0.06 of its potential returns per unit of risk. Shyft Group is currently generating about -0.03 per unit of risk. If you would invest 18,235 in Alamo Group on November 18, 2024 and sell it today you would earn a total of 221.00 from holding Alamo Group or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alamo Group vs. Shyft Group
Performance |
| Timeline |
| Alamo Group |
| Shyft Group |
Alamo and Shyft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alamo and Shyft
The main advantage of trading using opposite Alamo and Shyft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alamo position performs unexpectedly, Shyft 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 Shyft will offset losses from the drop in Shyft's long position.| Alamo vs. Hyster Yale Materials Handling | Alamo vs. Columbus McKinnon | Alamo vs. AGCO Corporation | Alamo vs. Titan International |
| Shyft vs. Astec Industries | Shyft vs. Hyster Yale Materials Handling | Shyft vs. Rev Group | Shyft vs. Lindsay |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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