Correlation Between Alta Equipment and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Alta Equipment and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Alta Equipment and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alta Equipment and Dow Jones.
Diversification Opportunities for Alta Equipment and Dow Jones
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alta and Dow is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Alta Equipment Group and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Alta Equipment i.e., Alta Equipment and Dow Jones go up and down completely randomly.
Pair Corralation between Alta Equipment and Dow Jones
Given the investment horizon of 90 days Alta Equipment is expected to generate 14.4 times less return on investment than Dow Jones. In addition to that, Alta Equipment is 4.87 times more volatile than Dow Jones Industrial. It trades about 0.0 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of volatility. If you would invest 3,359,792 in Dow Jones Industrial on August 28, 2024 and sell it today you would earn a total of 1,113,865 from holding Dow Jones Industrial or generate 33.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alta Equipment Group vs. Dow Jones Industrial
Performance |
| Timeline |
Alta Equipment and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Alta Equipment Group
Pair trading matchups for Alta Equipment
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Alta Equipment and Dow Jones
The main advantage of trading using opposite Alta Equipment and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alta Equipment position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Alta Equipment vs. PROG Holdings | Alta Equipment vs. McGrath RentCorp | Alta Equipment vs. Mega Matrix Corp | Alta Equipment vs. FTAI Aviation Ltd |
| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |