Correlation Between Alta Equipment and International Media
Can any of the company-specific risk be diversified away by investing in both Alta Equipment and International 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 International 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 International Media Acquisition, you can compare the effects of market volatilities on Alta Equipment and International 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 International Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alta Equipment and International Media.
Diversification Opportunities for Alta Equipment and International Media
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alta and International is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Alta Equipment Group and International Media Acquisitio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Media 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 International Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Media has no effect on the direction of Alta Equipment i.e., Alta Equipment and International Media go up and down completely randomly.
Pair Corralation between Alta Equipment and International Media
Given the investment horizon of 90 days Alta Equipment Group is expected to generate 1.79 times more return on investment than International Media. However, Alta Equipment is 1.79 times more volatile than International Media Acquisition. It trades about 0.02 of its potential returns per unit of risk. International Media Acquisition is currently generating about 0.01 per unit of risk. If you would invest 782.00 in Alta Equipment Group on August 30, 2024 and sell it today you would lose (8.00) from holding Alta Equipment Group or give up 1.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 39.68% |
| Values | Daily Returns |
Alta Equipment Group vs. International Media Acquisitio
Performance |
| Timeline |
| Alta Equipment Group |
| International Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alta Equipment and International Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alta Equipment and International Media
The main advantage of trading using opposite Alta Equipment and International Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alta Equipment position performs unexpectedly, International 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 International Media will offset losses from the drop in International 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 |
| International Media vs. Fidus Investment Corp | International Media vs. Alta Equipment Group | International Media vs. Aegon NV ADR | International Media vs. Broadstone Net Lease |
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.
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