Correlation Between Austin Engineering and Astec Industries
Can any of the company-specific risk be diversified away by investing in both Austin Engineering and Astec 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 Austin Engineering and Astec Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Austin Engineering Limited and Astec Industries, you can compare the effects of market volatilities on Austin Engineering and Astec 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 Austin Engineering with a short position of Astec Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austin Engineering and Astec Industries.
Diversification Opportunities for Austin Engineering and Astec Industries
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Austin and Astec is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Austin Engineering Limited and Astec Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astec Industries and Austin Engineering 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 Austin Engineering Limited are associated (or correlated) with Astec Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astec Industries has no effect on the direction of Austin Engineering i.e., Austin Engineering and Astec Industries go up and down completely randomly.
Pair Corralation between Austin Engineering and Astec Industries
If you would invest 3,146 in Astec Industries on August 30, 2024 and sell it today you would earn a total of 688.00 from holding Astec Industries or generate 21.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Austin Engineering Limited vs. Astec Industries
Performance |
| Timeline |
| Austin Engineering |
| Astec Industries |
Austin Engineering and Astec Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austin Engineering and Astec Industries
The main advantage of trading using opposite Austin Engineering and Astec Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austin Engineering position performs unexpectedly, Astec 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 Astec Industries will offset losses from the drop in Astec Industries' long position.| Austin Engineering vs. Buhler Industries | Austin Engineering vs. Ag Growth International | Austin Engineering vs. Grow Solutions Holdings | Austin Engineering vs. American Premium Water |
| Astec Industries vs. Columbus McKinnon | Astec Industries vs. Rev Group | Astec Industries vs. Wabash National |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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