Correlation Between Alta Equipment and Babcock Wilcox
Can any of the company-specific risk be diversified away by investing in both Alta Equipment and Babcock Wilcox 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 Alta Equipment and Babcock Wilcox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alta Equipment Group and Babcock Wilcox Enterprises, you can compare the effects of market volatilities on Alta Equipment and Babcock Wilcox 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 Alta Equipment with a short position of Babcock Wilcox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alta Equipment and Babcock Wilcox.
Diversification Opportunities for Alta Equipment and Babcock Wilcox
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alta and Babcock is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Alta Equipment Group and Babcock Wilcox Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Babcock Wilcox Enter and Alta Equipment 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 Alta Equipment Group are associated (or correlated) with Babcock Wilcox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Babcock Wilcox Enter has no effect on the direction of Alta Equipment i.e., Alta Equipment and Babcock Wilcox go up and down completely randomly.
Pair Corralation between Alta Equipment and Babcock Wilcox
Assuming the 90 days trading horizon Alta Equipment Group is expected to generate 0.17 times more return on investment than Babcock Wilcox. However, Alta Equipment Group is 5.84 times less risky than Babcock Wilcox. It trades about -0.01 of its potential returns per unit of risk. Babcock Wilcox Enterprises is currently generating about -0.05 per unit of risk. If you would invest 2,550 in Alta Equipment Group on August 28, 2024 and sell it today you would lose (3.00) from holding Alta Equipment Group or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alta Equipment Group vs. Babcock Wilcox Enterprises
Performance |
| Timeline |
| Alta Equipment Group |
| Babcock Wilcox Enter |
Alta Equipment and Babcock Wilcox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alta Equipment and Babcock Wilcox
The main advantage of trading using opposite Alta Equipment and Babcock Wilcox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alta Equipment position performs unexpectedly, Babcock Wilcox 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 Babcock Wilcox will offset losses from the drop in Babcock Wilcox's long position.| Alta Equipment vs. Triton International Limited | Alta Equipment vs. Babcock Wilcox Enterprises | Alta Equipment vs. Triton International Limited | Alta Equipment vs. Triton International Limited |
| Babcock Wilcox vs. Atlanticus Holdings Corp | Babcock Wilcox vs. Costamare | Babcock Wilcox vs. Alta Equipment Group | Babcock Wilcox vs. Global Ship Lease |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Stocks Directory Find actively traded stocks across global markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |