Correlation Between Alta Equipment and DIH Holdings
Can any of the company-specific risk be diversified away by investing in both Alta Equipment and DIH 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 DIH 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 DIH Holdings US,, you can compare the effects of market volatilities on Alta Equipment and DIH 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 DIH Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alta Equipment and DIH Holdings.
Diversification Opportunities for Alta Equipment and DIH Holdings
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alta and DIH is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Alta Equipment Group and DIH Holdings US, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIH Holdings US, 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 DIH Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIH Holdings US, has no effect on the direction of Alta Equipment i.e., Alta Equipment and DIH Holdings go up and down completely randomly.
Pair Corralation between Alta Equipment and DIH Holdings
Given the investment horizon of 90 days Alta Equipment Group is expected to under-perform the DIH Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Alta Equipment Group is 2.74 times less risky than DIH Holdings. The stock trades about -0.09 of its potential returns per unit of risk. The DIH Holdings US, is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 127.00 in DIH Holdings US, on September 12, 2024 and sell it today you would earn a total of 37.67 from holding DIH Holdings US, or generate 29.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alta Equipment Group vs. DIH Holdings US,
Performance |
| Timeline |
| Alta Equipment Group |
| DIH Holdings US, |
Alta Equipment and DIH Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alta Equipment and DIH Holdings
The main advantage of trading using opposite Alta Equipment and DIH Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alta Equipment position performs unexpectedly, DIH 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 DIH Holdings will offset losses from the drop in DIH Holdings' long position.| Alta Equipment vs. PROG Holdings | Alta Equipment vs. GATX Corporation | Alta Equipment vs. McGrath RentCorp | Alta Equipment vs. Custom Truck One |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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