Correlation Between Alta Equipment and Binah Capital
Can any of the company-specific risk be diversified away by investing in both Alta Equipment and Binah Capital 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 Binah Capital 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 Binah Capital Group,, you can compare the effects of market volatilities on Alta Equipment and Binah Capital 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 Binah Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alta Equipment and Binah Capital.
Diversification Opportunities for Alta Equipment and Binah Capital
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alta and Binah is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Alta Equipment Group and Binah Capital Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binah Capital Group, 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 Binah Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binah Capital Group, has no effect on the direction of Alta Equipment i.e., Alta Equipment and Binah Capital go up and down completely randomly.
Pair Corralation between Alta Equipment and Binah Capital
Given the investment horizon of 90 days Alta Equipment is expected to generate 2.14 times less return on investment than Binah Capital. But when comparing it to its historical volatility, Alta Equipment Group is 3.13 times less risky than Binah Capital. It trades about 0.2 of its potential returns per unit of risk. Binah Capital Group, is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 200.00 in Binah Capital Group, on September 4, 2024 and sell it today you would earn a total of 58.00 from holding Binah Capital Group, or generate 29.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Alta Equipment Group vs. Binah Capital Group,
Performance |
| Timeline |
| Alta Equipment Group |
| Binah Capital Group, |
Alta Equipment and Binah Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alta Equipment and Binah Capital
The main advantage of trading using opposite Alta Equipment and Binah Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alta Equipment position performs unexpectedly, Binah Capital 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 Binah Capital will offset losses from the drop in Binah Capital's long position.| Alta Equipment vs. PROG Holdings | Alta Equipment vs. GATX Corporation | Alta Equipment vs. McGrath RentCorp | Alta Equipment vs. Custom Truck One |
| Binah Capital vs. Visa Class A | Binah Capital vs. Diamond Hill Investment | Binah Capital vs. Associated Capital Group | Binah Capital vs. Brookfield Corp |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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