Correlation Between Alta Equipment and Inflection Point
Can any of the company-specific risk be diversified away by investing in both Alta Equipment and Inflection Point 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 Inflection Point 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 Inflection Point Acquisition, you can compare the effects of market volatilities on Alta Equipment and Inflection Point 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 Inflection Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alta Equipment and Inflection Point.
Diversification Opportunities for Alta Equipment and Inflection Point
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alta and Inflection is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Alta Equipment Group and Inflection Point Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflection Point Acq 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 Inflection Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflection Point Acq has no effect on the direction of Alta Equipment i.e., Alta Equipment and Inflection Point go up and down completely randomly.
Pair Corralation between Alta Equipment and Inflection Point
Given the investment horizon of 90 days Alta Equipment Group is expected to generate 17.96 times more return on investment than Inflection Point. However, Alta Equipment is 17.96 times more volatile than Inflection Point Acquisition. It trades about 0.03 of its potential returns per unit of risk. Inflection Point Acquisition is currently generating about 0.13 per unit of risk. If you would invest 764.00 in Alta Equipment Group on September 2, 2024 and sell it today you would earn a total of 27.00 from holding Alta Equipment Group or generate 3.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alta Equipment Group vs. Inflection Point Acquisition
Performance |
| Timeline |
| Alta Equipment Group |
| Inflection Point Acq |
Alta Equipment and Inflection Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alta Equipment and Inflection Point
The main advantage of trading using opposite Alta Equipment and Inflection Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alta Equipment position performs unexpectedly, Inflection Point 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 Inflection Point will offset losses from the drop in Inflection Point's long position.| Alta Equipment vs. PROG Holdings | Alta Equipment vs. GATX Corporation | Alta Equipment vs. McGrath RentCorp | Alta Equipment vs. Custom Truck One |
| Inflection Point vs. Kinsale Capital Group | Inflection Point vs. GoHealth | Inflection Point vs. Stratasys | Inflection Point vs. NI Holdings |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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