Correlation Between AmeraMex International and Alamo
Can any of the company-specific risk be diversified away by investing in both AmeraMex International and Alamo 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 AmeraMex International and Alamo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AmeraMex International and Alamo Group, you can compare the effects of market volatilities on AmeraMex International and Alamo 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 AmeraMex International with a short position of Alamo. Check out your portfolio center. Please also check ongoing floating volatility patterns of AmeraMex International and Alamo.
Diversification Opportunities for AmeraMex International and Alamo
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AmeraMex and Alamo is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding AmeraMex International and Alamo Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamo Group and AmeraMex International 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 AmeraMex International are associated (or correlated) with Alamo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alamo Group has no effect on the direction of AmeraMex International i.e., AmeraMex International and Alamo go up and down completely randomly.
Pair Corralation between AmeraMex International and Alamo
Given the investment horizon of 90 days AmeraMex International is expected to generate 5.15 times more return on investment than Alamo. However, AmeraMex International is 5.15 times more volatile than Alamo Group. It trades about 0.04 of its potential returns per unit of risk. Alamo Group is currently generating about 0.04 per unit of risk. If you would invest 44.00 in AmeraMex International on August 26, 2024 and sell it today you would lose (2.00) from holding AmeraMex International or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AmeraMex International vs. Alamo Group
Performance |
| Timeline |
| AmeraMex International |
| Alamo Group |
AmeraMex International and Alamo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AmeraMex International and Alamo
The main advantage of trading using opposite AmeraMex International and Alamo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AmeraMex International position performs unexpectedly, Alamo 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 Alamo will offset losses from the drop in Alamo's long position.| AmeraMex International vs. Lion Electric Corp | AmeraMex International vs. Nikola Corp | AmeraMex International vs. Buhler Industries | AmeraMex International vs. Toyota Industries |
| Alamo vs. Hyster Yale Materials Handling | Alamo vs. Columbus McKinnon | Alamo vs. AGCO Corporation | Alamo vs. Titan International |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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