Correlation Between Astec Industries and Columbus McKinnon
Can any of the company-specific risk be diversified away by investing in both Astec Industries and Columbus McKinnon 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 Astec Industries and Columbus McKinnon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astec Industries and Columbus McKinnon, you can compare the effects of market volatilities on Astec Industries and Columbus McKinnon 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 Astec Industries with a short position of Columbus McKinnon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astec Industries and Columbus McKinnon.
Diversification Opportunities for Astec Industries and Columbus McKinnon
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Astec and Columbus is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Astec Industries and Columbus McKinnon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbus McKinnon and Astec Industries 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 Astec Industries are associated (or correlated) with Columbus McKinnon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbus McKinnon has no effect on the direction of Astec Industries i.e., Astec Industries and Columbus McKinnon go up and down completely randomly.
Pair Corralation between Astec Industries and Columbus McKinnon
Given the investment horizon of 90 days Astec Industries is expected to generate 0.22 times more return on investment than Columbus McKinnon. However, Astec Industries is 4.62 times less risky than Columbus McKinnon. It trades about -0.05 of its potential returns per unit of risk. Columbus McKinnon is currently generating about -0.23 per unit of risk. If you would invest 3,385 in Astec Industries on November 18, 2024 and sell it today you would lose (84.00) from holding Astec Industries or give up 2.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astec Industries vs. Columbus McKinnon
Performance |
| Timeline |
| Astec Industries |
| Columbus McKinnon |
Astec Industries and Columbus McKinnon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astec Industries and Columbus McKinnon
The main advantage of trading using opposite Astec Industries and Columbus McKinnon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astec Industries position performs unexpectedly, Columbus McKinnon 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 Columbus McKinnon will offset losses from the drop in Columbus McKinnon's long position.| Astec Industries vs. Hyster Yale Materials Handling | Astec Industries vs. Shyft Group | Astec Industries vs. Rev Group | Astec Industries vs. Lindsay |
| Columbus McKinnon vs. Lindsay | Columbus McKinnon vs. Astec Industries | Columbus McKinnon vs. Shyft Group | Columbus McKinnon vs. AGCO Corporation |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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