Correlation Between Alta Equipment and Cumulus Media
Can any of the company-specific risk be diversified away by investing in both Alta Equipment and Cumulus Media 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 Cumulus Media 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 Cumulus Media Class, you can compare the effects of market volatilities on Alta Equipment and Cumulus Media 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 Cumulus Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alta Equipment and Cumulus Media.
Diversification Opportunities for Alta Equipment and Cumulus Media
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alta and Cumulus is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Alta Equipment Group and Cumulus Media Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cumulus Media Class 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 Cumulus Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cumulus Media Class has no effect on the direction of Alta Equipment i.e., Alta Equipment and Cumulus Media go up and down completely randomly.
Pair Corralation between Alta Equipment and Cumulus Media
Given the investment horizon of 90 days Alta Equipment Group is expected to generate 0.79 times more return on investment than Cumulus Media. However, Alta Equipment Group is 1.26 times less risky than Cumulus Media. It trades about 0.2 of its potential returns per unit of risk. Cumulus Media Class is currently generating about -0.27 per unit of risk. If you would invest 639.00 in Alta Equipment Group on August 30, 2024 and sell it today you would earn a total of 135.00 from holding Alta Equipment Group or generate 21.13% 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. Cumulus Media Class
Performance |
| Timeline |
| Alta Equipment Group |
| Cumulus Media Class |
Alta Equipment and Cumulus Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alta Equipment and Cumulus Media
The main advantage of trading using opposite Alta Equipment and Cumulus Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alta Equipment position performs unexpectedly, Cumulus Media 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 Cumulus Media will offset losses from the drop in Cumulus Media's long position.| Alta Equipment vs. HE Equipment Services | Alta Equipment vs. GATX Corporation | Alta Equipment vs. McGrath RentCorp | Alta Equipment vs. Ryder System |
| Cumulus Media vs. E W Scripps | Cumulus Media vs. Gray Television | Cumulus Media vs. ProSiebenSat1 Media AG | Cumulus Media vs. RTL Group SA |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |