Correlation Between Ametek and CVD Equipment
Can any of the company-specific risk be diversified away by investing in both Ametek and CVD Equipment 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 Ametek and CVD Equipment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ametek Inc and CVD Equipment, you can compare the effects of market volatilities on Ametek and CVD Equipment 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 Ametek with a short position of CVD Equipment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ametek and CVD Equipment.
Diversification Opportunities for Ametek and CVD Equipment
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ametek and CVD is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ametek Inc and CVD Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVD Equipment and Ametek 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 Ametek Inc are associated (or correlated) with CVD Equipment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVD Equipment has no effect on the direction of Ametek i.e., Ametek and CVD Equipment go up and down completely randomly.
Pair Corralation between Ametek and CVD Equipment
Considering the 90-day investment horizon Ametek Inc is expected to generate 0.49 times more return on investment than CVD Equipment. However, Ametek Inc is 2.05 times less risky than CVD Equipment. It trades about 0.31 of its potential returns per unit of risk. CVD Equipment is currently generating about 0.04 per unit of risk. If you would invest 16,891 in Ametek Inc on August 31, 2024 and sell it today you would earn a total of 2,619 from holding Ametek Inc or generate 15.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ametek Inc vs. CVD Equipment
Performance |
| Timeline |
| Ametek Inc |
| CVD Equipment |
Ametek and CVD Equipment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ametek and CVD Equipment
The main advantage of trading using opposite Ametek and CVD Equipment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ametek position performs unexpectedly, CVD Equipment 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 CVD Equipment will offset losses from the drop in CVD Equipment's long position.The idea behind Ametek Inc and CVD Equipment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| CVD Equipment vs. Standex International | CVD Equipment vs. Intevac | CVD Equipment vs. Thermon Group Holdings | CVD Equipment vs. Enpro Industries |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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