Correlation Between Badger Infrastructure and Limbach Holdings
Can any of the company-specific risk be diversified away by investing in both Badger Infrastructure and Limbach Holdings 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 Badger Infrastructure and Limbach Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Badger Infrastructure Solutions and Limbach Holdings, you can compare the effects of market volatilities on Badger Infrastructure and Limbach Holdings 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 Badger Infrastructure with a short position of Limbach Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Badger Infrastructure and Limbach Holdings.
Diversification Opportunities for Badger Infrastructure and Limbach Holdings
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Badger and Limbach is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Badger Infrastructure Solution and Limbach Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Limbach Holdings and Badger Infrastructure 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 Badger Infrastructure Solutions are associated (or correlated) with Limbach Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Limbach Holdings has no effect on the direction of Badger Infrastructure i.e., Badger Infrastructure and Limbach Holdings go up and down completely randomly.
Pair Corralation between Badger Infrastructure and Limbach Holdings
Assuming the 90 days horizon Badger Infrastructure is expected to generate 2.71 times less return on investment than Limbach Holdings. But when comparing it to its historical volatility, Badger Infrastructure Solutions is 1.54 times less risky than Limbach Holdings. It trades about 0.07 of its potential returns per unit of risk. Limbach Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,338 in Limbach Holdings on August 31, 2024 and sell it today you would earn a total of 7,611 from holding Limbach Holdings or generate 325.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 64.71% |
| Values | Daily Returns |
Badger Infrastructure Solution vs. Limbach Holdings
Performance |
| Timeline |
| Badger Infrastructure |
| Limbach Holdings |
Badger Infrastructure and Limbach Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Badger Infrastructure and Limbach Holdings
The main advantage of trading using opposite Badger Infrastructure and Limbach Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Badger Infrastructure position performs unexpectedly, Limbach Holdings 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 Limbach Holdings will offset losses from the drop in Limbach Holdings' long position.| Badger Infrastructure vs. ACS Actividades De | Badger Infrastructure vs. Arcadis NV | Badger Infrastructure vs. Acciona SA | Badger Infrastructure vs. JGC Corp |
| Limbach Holdings vs. MYR Group | Limbach Holdings vs. Granite Construction Incorporated | Limbach Holdings vs. Construction Partners | Limbach Holdings vs. Great Lakes Dredge |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |