Correlation Between Alliance Global and Mammoth Energy
Can any of the company-specific risk be diversified away by investing in both Alliance Global and Mammoth Energy 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 Alliance Global and Mammoth Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliance Global Group and Mammoth Energy Services, you can compare the effects of market volatilities on Alliance Global and Mammoth Energy 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 Alliance Global with a short position of Mammoth Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Global and Mammoth Energy.
Diversification Opportunities for Alliance Global and Mammoth Energy
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alliance and Mammoth is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Global Group and Mammoth Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mammoth Energy Services and Alliance Global 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 Alliance Global Group are associated (or correlated) with Mammoth Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mammoth Energy Services has no effect on the direction of Alliance Global i.e., Alliance Global and Mammoth Energy go up and down completely randomly.
Pair Corralation between Alliance Global and Mammoth Energy
Assuming the 90 days horizon Alliance Global Group is expected to under-perform the Mammoth Energy. But the pink sheet apears to be less risky and, when comparing its historical volatility, Alliance Global Group is 1.72 times less risky than Mammoth Energy. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Mammoth Energy Services is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 383.00 in Mammoth Energy Services on August 27, 2024 and sell it today you would lose (34.00) from holding Mammoth Energy Services or give up 8.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 87.28% |
| Values | Daily Returns |
Alliance Global Group vs. Mammoth Energy Services
Performance |
| Timeline |
| Alliance Global Group |
| Mammoth Energy Services |
Alliance Global and Mammoth Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliance Global and Mammoth Energy
The main advantage of trading using opposite Alliance Global and Mammoth Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliance Global position performs unexpectedly, Mammoth Energy 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 Mammoth Energy will offset losses from the drop in Mammoth Energy's long position.| Alliance Global vs. Alliance Recovery | Alliance Global vs. Ayala | Alliance Global vs. Alaska Power Telephone | Alliance Global vs. RCABS Inc |
| Mammoth Energy vs. Matthews International | Mammoth Energy vs. Griffon | Mammoth Energy vs. Steel Partners Holdings | Mammoth Energy vs. Compass Diversified Holdings |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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