Correlation Between Allied Motion and Ouster
Can any of the company-specific risk be diversified away by investing in both Allied Motion and Ouster 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 Allied Motion and Ouster into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allied Motion Technologies and Ouster Inc, you can compare the effects of market volatilities on Allied Motion and Ouster 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 Allied Motion with a short position of Ouster. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Motion and Ouster.
Diversification Opportunities for Allied Motion and Ouster
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Allied and Ouster is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Allied Motion Technologies and Ouster Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ouster Inc and Allied Motion 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 Allied Motion Technologies are associated (or correlated) with Ouster. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ouster Inc has no effect on the direction of Allied Motion i.e., Allied Motion and Ouster go up and down completely randomly.
Pair Corralation between Allied Motion and Ouster
Given the investment horizon of 90 days Allied Motion is expected to generate 2.34 times less return on investment than Ouster. But when comparing it to its historical volatility, Allied Motion Technologies is 2.74 times less risky than Ouster. It trades about 0.05 of its potential returns per unit of risk. Ouster Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 895.00 in Ouster Inc on September 19, 2024 and sell it today you would earn a total of 275.00 from holding Ouster Inc or generate 30.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 28.63% |
| Values | Daily Returns |
Allied Motion Technologies vs. Ouster Inc
Performance |
| Timeline |
| Allied Motion Techno |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ouster Inc |
Allied Motion and Ouster Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Motion and Ouster
The main advantage of trading using opposite Allied Motion and Ouster positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Motion position performs unexpectedly, Ouster 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 Ouster will offset losses from the drop in Ouster's long position.| Allied Motion vs. Plexus Corp | Allied Motion vs. Sanmina | Allied Motion vs. Bel Fuse A | Allied Motion vs. Methode Electronics |
| Ouster vs. KULR Technology Group | Ouster vs. LightPath Technologies | Ouster vs. Daktronics | Ouster vs. Kopin |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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