Correlation Between AZZ Incorporated and Maximus
Can any of the company-specific risk be diversified away by investing in both AZZ Incorporated and Maximus 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 AZZ Incorporated and Maximus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AZZ Incorporated and Maximus, you can compare the effects of market volatilities on AZZ Incorporated and Maximus 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 AZZ Incorporated with a short position of Maximus. Check out your portfolio center. Please also check ongoing floating volatility patterns of AZZ Incorporated and Maximus.
Diversification Opportunities for AZZ Incorporated and Maximus
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AZZ and Maximus is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding AZZ Incorporated and Maximus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maximus and AZZ Incorporated 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 AZZ Incorporated are associated (or correlated) with Maximus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maximus has no effect on the direction of AZZ Incorporated i.e., AZZ Incorporated and Maximus go up and down completely randomly.
Pair Corralation between AZZ Incorporated and Maximus
Considering the 90-day investment horizon AZZ Incorporated is expected to generate 1.38 times more return on investment than Maximus. However, AZZ Incorporated is 1.38 times more volatile than Maximus. It trades about 0.09 of its potential returns per unit of risk. Maximus is currently generating about 0.01 per unit of risk. If you would invest 4,141 in AZZ Incorporated on August 27, 2024 and sell it today you would earn a total of 5,413 from holding AZZ Incorporated or generate 130.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AZZ Incorporated vs. Maximus
Performance |
| Timeline |
| AZZ Incorporated |
| Maximus |
AZZ Incorporated and Maximus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AZZ Incorporated and Maximus
The main advantage of trading using opposite AZZ Incorporated and Maximus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AZZ Incorporated position performs unexpectedly, Maximus 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 Maximus will offset losses from the drop in Maximus' long position.| AZZ Incorporated vs. Maximus | AZZ Incorporated vs. ABM Industries Incorporated | AZZ Incorporated vs. CBIZ Inc | AZZ Incorporated vs. Cass Information Systems |
| Maximus vs. Oneconnect Financial Technology | Maximus vs. Global Business Travel | Maximus vs. Alight Inc | Maximus vs. CS Disco LLC |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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