Correlation Between Ampco Pittsburgh and Mueller Industries
Can any of the company-specific risk be diversified away by investing in both Ampco Pittsburgh and Mueller Industries 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 Mueller Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ampco Pittsburgh and Mueller Industries, you can compare the effects of market volatilities on Ampco Pittsburgh and Mueller Industries 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 Mueller Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ampco Pittsburgh and Mueller Industries.
Diversification Opportunities for Ampco Pittsburgh and Mueller Industries
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ampco and Mueller is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ampco Pittsburgh and Mueller Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mueller Industries 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 Mueller Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mueller Industries has no effect on the direction of Ampco Pittsburgh i.e., Ampco Pittsburgh and Mueller Industries go up and down completely randomly.
Pair Corralation between Ampco Pittsburgh and Mueller Industries
Allowing for the 90-day total investment horizon Ampco Pittsburgh is expected to under-perform the Mueller Industries. In addition to that, Ampco Pittsburgh is 1.49 times more volatile than Mueller Industries. It trades about -0.04 of its total potential returns per unit of risk. Mueller Industries is currently generating about 0.16 per unit of volatility. If you would invest 7,050 in Mueller Industries on August 24, 2024 and sell it today you would earn a total of 2,120 from holding Mueller Industries or generate 30.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ampco Pittsburgh vs. Mueller Industries
Performance |
| Timeline |
| Ampco Pittsburgh |
| Mueller Industries |
Ampco Pittsburgh and Mueller Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ampco Pittsburgh and Mueller Industries
The main advantage of trading using opposite Ampco Pittsburgh and Mueller Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ampco Pittsburgh position performs unexpectedly, Mueller Industries 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 Mueller Industries will offset losses from the drop in Mueller Industries' long position.| Ampco Pittsburgh vs. Northwest Pipe | Ampco Pittsburgh vs. Insteel Industries | Ampco Pittsburgh vs. Carpenter Technology | Ampco Pittsburgh vs. ESAB Corp |
| Mueller Industries vs. Insteel Industries | Mueller Industries vs. Carpenter Technology | Mueller Industries vs. Haynes International | Mueller Industries 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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