Correlation Between Artisan Partners and Alta Equipment
Can any of the company-specific risk be diversified away by investing in both Artisan Partners and Alta 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 Artisan Partners and Alta Equipment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Artisan Partners Asset and Alta Equipment Group, you can compare the effects of market volatilities on Artisan Partners and Alta 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 Artisan Partners with a short position of Alta Equipment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Partners and Alta Equipment.
Diversification Opportunities for Artisan Partners and Alta Equipment
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Artisan and Alta is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Partners Asset and Alta Equipment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alta Equipment Group and Artisan Partners 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 Artisan Partners Asset are associated (or correlated) with Alta Equipment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alta Equipment Group has no effect on the direction of Artisan Partners i.e., Artisan Partners and Alta Equipment go up and down completely randomly.
Pair Corralation between Artisan Partners and Alta Equipment
Given the investment horizon of 90 days Artisan Partners is expected to generate 2.31 times less return on investment than Alta Equipment. But when comparing it to its historical volatility, Artisan Partners Asset is 2.11 times less risky than Alta Equipment. It trades about 0.19 of its potential returns per unit of risk. Alta Equipment Group is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 665.00 in Alta Equipment Group on August 28, 2024 and sell it today you would earn a total of 147.00 from holding Alta Equipment Group or generate 22.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan Partners Asset vs. Alta Equipment Group
Performance |
| Timeline |
| Artisan Partners Asset |
| Alta Equipment Group |
Artisan Partners and Alta Equipment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Partners and Alta Equipment
The main advantage of trading using opposite Artisan Partners and Alta Equipment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Partners position performs unexpectedly, Alta 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 Alta Equipment will offset losses from the drop in Alta Equipment's long position.| Artisan Partners vs. Federated Premier Municipal | Artisan Partners vs. Blackrock Muniyield | Artisan Partners vs. Diamond Hill Investment | Artisan Partners vs. NXG NextGen Infrastructure |
| Alta Equipment vs. PROG Holdings | Alta Equipment vs. McGrath RentCorp | Alta Equipment vs. Mega Matrix Corp | Alta Equipment vs. FTAI Aviation Ltd |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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