Correlation Between Ampco Pittsburgh and Gulf Island
Can any of the company-specific risk be diversified away by investing in both Ampco Pittsburgh and Gulf Island 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 Ampco Pittsburgh and Gulf Island into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ampco Pittsburgh and Gulf Island Fabrication, you can compare the effects of market volatilities on Ampco Pittsburgh and Gulf Island 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 Ampco Pittsburgh with a short position of Gulf Island. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ampco Pittsburgh and Gulf Island.
Diversification Opportunities for Ampco Pittsburgh and Gulf Island
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ampco and Gulf is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ampco Pittsburgh and Gulf Island Fabrication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulf Island Fabrication and Ampco Pittsburgh 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 Ampco Pittsburgh are associated (or correlated) with Gulf Island. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulf Island Fabrication has no effect on the direction of Ampco Pittsburgh i.e., Ampco Pittsburgh and Gulf Island go up and down completely randomly.
Pair Corralation between Ampco Pittsburgh and Gulf Island
Allowing for the 90-day total investment horizon Ampco Pittsburgh is expected to under-perform the Gulf Island. In addition to that, Ampco Pittsburgh is 2.2 times more volatile than Gulf Island Fabrication. It trades about -0.2 of its total potential returns per unit of risk. Gulf Island Fabrication is currently generating about -0.05 per unit of volatility. If you would invest 703.00 in Gulf Island Fabrication on November 18, 2024 and sell it today you would lose (15.00) from holding Gulf Island Fabrication or give up 2.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ampco Pittsburgh vs. Gulf Island Fabrication
Performance |
| Timeline |
| Ampco Pittsburgh |
| Gulf Island Fabrication |
Ampco Pittsburgh and Gulf Island Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ampco Pittsburgh and Gulf Island
The main advantage of trading using opposite Ampco Pittsburgh and Gulf Island positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ampco Pittsburgh position performs unexpectedly, Gulf Island 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 Gulf Island will offset losses from the drop in Gulf Island's long position.| Ampco Pittsburgh vs. Northwest Pipe | Ampco Pittsburgh vs. Insteel Industries | Ampco Pittsburgh vs. Carpenter Technology | Ampco Pittsburgh vs. ESAB Corp |
| Gulf Island vs. Insteel Industries | Gulf Island vs. Mayville Engineering Co | Gulf Island vs. ESAB Corp | Gulf Island vs. Northwest Pipe |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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