Correlation Between Alta Equipment and Zoomcar Holdings
Can any of the company-specific risk be diversified away by investing in both Alta Equipment and Zoomcar Holdings 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 Zoomcar Holdings 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 Zoomcar Holdings, you can compare the effects of market volatilities on Alta Equipment and Zoomcar Holdings 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 Zoomcar Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alta Equipment and Zoomcar Holdings.
Diversification Opportunities for Alta Equipment and Zoomcar Holdings
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alta and Zoomcar is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Alta Equipment Group and Zoomcar Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoomcar Holdings 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 Zoomcar Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoomcar Holdings has no effect on the direction of Alta Equipment i.e., Alta Equipment and Zoomcar Holdings go up and down completely randomly.
Pair Corralation between Alta Equipment and Zoomcar Holdings
Assuming the 90 days trading horizon Alta Equipment Group is expected to generate 0.03 times more return on investment than Zoomcar Holdings. However, Alta Equipment Group is 31.04 times less risky than Zoomcar Holdings. It trades about 0.0 of its potential returns per unit of risk. Zoomcar Holdings is currently generating about -0.27 per unit of risk. If you would invest 2,545 in Alta Equipment Group on November 28, 2024 and sell it today you would earn a total of 0.00 from holding Alta Equipment Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alta Equipment Group vs. Zoomcar Holdings
Performance |
| Timeline |
| Alta Equipment Group |
| Zoomcar Holdings |
Alta Equipment and Zoomcar Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alta Equipment and Zoomcar Holdings
The main advantage of trading using opposite Alta Equipment and Zoomcar Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alta Equipment position performs unexpectedly, Zoomcar Holdings 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 Zoomcar Holdings will offset losses from the drop in Zoomcar Holdings' 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 |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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