Correlation Between ATS and Twin Disc
Can any of the company-specific risk be diversified away by investing in both ATS and Twin Disc 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 ATS and Twin Disc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATS Corporation and Twin Disc Incorporated, you can compare the effects of market volatilities on ATS and Twin Disc 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 ATS with a short position of Twin Disc. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATS and Twin Disc.
Diversification Opportunities for ATS and Twin Disc
Very good diversification
The 3 months correlation between ATS and Twin is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding ATS Corp. and Twin Disc Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Twin Disc and ATS 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 ATS Corporation are associated (or correlated) with Twin Disc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Twin Disc has no effect on the direction of ATS i.e., ATS and Twin Disc go up and down completely randomly.
Pair Corralation between ATS and Twin Disc
Considering the 90-day investment horizon ATS Corporation is expected to generate 0.97 times more return on investment than Twin Disc. However, ATS Corporation is 1.03 times less risky than Twin Disc. It trades about 0.05 of its potential returns per unit of risk. Twin Disc Incorporated is currently generating about 0.0 per unit of risk. If you would invest 2,905 in ATS Corporation on August 29, 2024 and sell it today you would earn a total of 107.00 from holding ATS Corporation or generate 3.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATS Corp. vs. Twin Disc Incorporated
Performance |
| Timeline |
| ATS Corporation |
| Twin Disc |
ATS and Twin Disc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATS and Twin Disc
The main advantage of trading using opposite ATS and Twin Disc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATS position performs unexpectedly, Twin Disc 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 Twin Disc will offset losses from the drop in Twin Disc's long position.The idea behind ATS Corporation and Twin Disc Incorporated pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Twin Disc vs. Standex International | Twin Disc vs. Intevac | Twin Disc vs. Thermon Group Holdings | Twin Disc vs. Enpro Industries |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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