Correlation Between Alta Equipment and First Ship
Can any of the company-specific risk be diversified away by investing in both Alta Equipment and First Ship 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 First Ship 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 First Ship Lease, you can compare the effects of market volatilities on Alta Equipment and First Ship 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 First Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alta Equipment and First Ship.
Diversification Opportunities for Alta Equipment and First Ship
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alta and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alta Equipment Group and First Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Ship Lease 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 First Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Ship Lease has no effect on the direction of Alta Equipment i.e., Alta Equipment and First Ship go up and down completely randomly.
Pair Corralation between Alta Equipment and First Ship
If you would invest 648.00 in Alta Equipment Group on August 31, 2024 and sell it today you would earn a total of 126.00 from holding Alta Equipment Group or generate 19.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alta Equipment Group vs. First Ship Lease
Performance |
| Timeline |
| Alta Equipment Group |
| First Ship Lease |
Alta Equipment and First Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alta Equipment and First Ship
The main advantage of trading using opposite Alta Equipment and First Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alta Equipment position performs unexpectedly, First Ship 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 First Ship will offset losses from the drop in First Ship's long position.| Alta Equipment vs. PROG Holdings | Alta Equipment vs. GATX Corporation | Alta Equipment vs. McGrath RentCorp | Alta Equipment vs. Custom Truck One |
| First Ship vs. United Rentals | First Ship vs. Ashtead Gro | First Ship vs. Ashtead Group plc | First Ship vs. AerCap Holdings NV |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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