Correlation Between Alamo and Wabash National
Can any of the company-specific risk be diversified away by investing in both Alamo and Wabash National 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 Wabash National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alamo Group and Wabash National, you can compare the effects of market volatilities on Alamo and Wabash National 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 Wabash National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alamo and Wabash National.
Diversification Opportunities for Alamo and Wabash National
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alamo and Wabash is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Alamo Group and Wabash National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wabash National 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 Wabash National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wabash National has no effect on the direction of Alamo i.e., Alamo and Wabash National go up and down completely randomly.
Pair Corralation between Alamo and Wabash National
Considering the 90-day investment horizon Alamo Group is expected to under-perform the Wabash National. But the stock apears to be less risky and, when comparing its historical volatility, Alamo Group is 1.31 times less risky than Wabash National. The stock trades about -0.21 of its potential returns per unit of risk. The Wabash National is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 1,694 in Wabash National on October 20, 2024 and sell it today you would lose (71.00) from holding Wabash National or give up 4.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Alamo Group vs. Wabash National
Performance |
| Timeline |
| Alamo Group |
| Wabash National |
Alamo and Wabash National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alamo and Wabash National
The main advantage of trading using opposite Alamo and Wabash National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alamo position performs unexpectedly, Wabash National 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 Wabash National will offset losses from the drop in Wabash National's long position.| Alamo vs. Hyster Yale Materials Handling | Alamo vs. Columbus McKinnon | Alamo vs. AGCO Corporation | Alamo vs. Titan International |
| Wabash National vs. Rev Group | Wabash National vs. Gencor Industries | Wabash National vs. Alamo Group | Wabash National vs. Columbus McKinnon |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |