Correlation Between Astec Industries and Daimler Truck
Can any of the company-specific risk be diversified away by investing in both Astec Industries and Daimler Truck 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 Daimler Truck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astec Industries and Daimler Truck Holding, you can compare the effects of market volatilities on Astec Industries and Daimler Truck 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 Daimler Truck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astec Industries and Daimler Truck.
Diversification Opportunities for Astec Industries and Daimler Truck
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Astec and Daimler is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Astec Industries and Daimler Truck Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daimler Truck Holding 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 Daimler Truck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daimler Truck Holding has no effect on the direction of Astec Industries i.e., Astec Industries and Daimler Truck go up and down completely randomly.
Pair Corralation between Astec Industries and Daimler Truck
Given the investment horizon of 90 days Astec Industries is expected to generate 1.79 times more return on investment than Daimler Truck. However, Astec Industries is 1.79 times more volatile than Daimler Truck Holding. It trades about 0.27 of its potential returns per unit of risk. Daimler Truck Holding is currently generating about -0.24 per unit of risk. If you would invest 3,190 in Astec Industries on September 2, 2024 and sell it today you would earn a total of 671.00 from holding Astec Industries or generate 21.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astec Industries vs. Daimler Truck Holding
Performance |
| Timeline |
| Astec Industries |
| Daimler Truck Holding |
Astec Industries and Daimler Truck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astec Industries and Daimler Truck
The main advantage of trading using opposite Astec Industries and Daimler Truck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astec Industries position performs unexpectedly, Daimler Truck 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 Daimler Truck will offset losses from the drop in Daimler Truck's long position.| Astec Industries vs. Hyster Yale Materials Handling | Astec Industries vs. Manitex International | Astec Industries vs. Shyft Group | Astec Industries vs. Rev Group |
| Daimler Truck vs. American Premium Water | Daimler Truck vs. Arts Way Manufacturing Co | Daimler Truck vs. Astec Industries | Daimler Truck vs. Alamo Group |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |