Correlation Between Alta Equipment and Inter Parfums
Can any of the company-specific risk be diversified away by investing in both Alta Equipment and Inter Parfums 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 Inter Parfums 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 Inter Parfums, you can compare the effects of market volatilities on Alta Equipment and Inter Parfums 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 Inter Parfums. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alta Equipment and Inter Parfums.
Diversification Opportunities for Alta Equipment and Inter Parfums
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alta and Inter is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Alta Equipment Group and Inter Parfums in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Parfums 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 Inter Parfums. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Parfums has no effect on the direction of Alta Equipment i.e., Alta Equipment and Inter Parfums go up and down completely randomly.
Pair Corralation between Alta Equipment and Inter Parfums
Given the investment horizon of 90 days Alta Equipment Group is expected to generate 2.64 times more return on investment than Inter Parfums. However, Alta Equipment is 2.64 times more volatile than Inter Parfums. It trades about 0.18 of its potential returns per unit of risk. Inter Parfums is currently generating about 0.26 per unit of risk. 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 | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alta Equipment Group vs. Inter Parfums
Performance |
| Timeline |
| Alta Equipment Group |
| Inter Parfums |
Alta Equipment and Inter Parfums Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alta Equipment and Inter Parfums
The main advantage of trading using opposite Alta Equipment and Inter Parfums positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alta Equipment position performs unexpectedly, Inter Parfums 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 Inter Parfums will offset losses from the drop in Inter Parfums' long position.| Alta Equipment vs. PROG Holdings | Alta Equipment vs. GATX Corporation | Alta Equipment vs. McGrath RentCorp | Alta Equipment vs. Custom Truck One |
| Inter Parfums vs. Aquagold International | Inter Parfums vs. Morningstar Unconstrained Allocation | Inter Parfums vs. Thrivent High Yield | Inter Parfums vs. Via Renewables |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |