Correlation Between Alta Equipment and KORE Group
Can any of the company-specific risk be diversified away by investing in both Alta Equipment and KORE Group 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 KORE Group 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 KORE Group Holdings, you can compare the effects of market volatilities on Alta Equipment and KORE Group 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 KORE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alta Equipment and KORE Group.
Diversification Opportunities for Alta Equipment and KORE Group
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alta and KORE is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Alta Equipment Group and KORE Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KORE Group Holdings 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 KORE Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KORE Group Holdings has no effect on the direction of Alta Equipment i.e., Alta Equipment and KORE Group go up and down completely randomly.
Pair Corralation between Alta Equipment and KORE Group
Given the investment horizon of 90 days Alta Equipment is expected to generate 3.16 times less return on investment than KORE Group. But when comparing it to its historical volatility, Alta Equipment Group is 3.78 times less risky than KORE Group. It trades about 0.24 of its potential returns per unit of risk. KORE Group Holdings is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 147.00 in KORE Group Holdings on October 24, 2024 and sell it today you would earn a total of 55.00 from holding KORE Group Holdings or generate 37.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alta Equipment Group vs. KORE Group Holdings
Performance |
| Timeline |
| Alta Equipment Group |
| KORE Group Holdings |
Alta Equipment and KORE Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alta Equipment and KORE Group
The main advantage of trading using opposite Alta Equipment and KORE Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alta Equipment position performs unexpectedly, KORE Group 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 KORE Group will offset losses from the drop in KORE Group's long position.| Alta Equipment vs. PROG Holdings | Alta Equipment vs. GATX Corporation | Alta Equipment vs. McGrath RentCorp | Alta Equipment vs. Custom Truck One |
| KORE Group vs. Liberty Broadband Srs | KORE Group vs. Cable One | KORE Group vs. Liberty Broadband Corp | KORE Group vs. Telkom Indonesia Tbk |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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