Correlation Between Concrete Pumping and Babcock International
Can any of the company-specific risk be diversified away by investing in both Concrete Pumping and Babcock International 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 Concrete Pumping and Babcock International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Concrete Pumping Holdings and Babcock International Group, you can compare the effects of market volatilities on Concrete Pumping and Babcock International 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 Concrete Pumping with a short position of Babcock International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concrete Pumping and Babcock International.
Diversification Opportunities for Concrete Pumping and Babcock International
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Concrete and Babcock is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Concrete Pumping Holdings and Babcock International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Babcock International and Concrete Pumping 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 Concrete Pumping Holdings are associated (or correlated) with Babcock International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Babcock International has no effect on the direction of Concrete Pumping i.e., Concrete Pumping and Babcock International go up and down completely randomly.
Pair Corralation between Concrete Pumping and Babcock International
Assuming the 90 days horizon Concrete Pumping Holdings is expected to generate 5.22 times more return on investment than Babcock International. However, Concrete Pumping is 5.22 times more volatile than Babcock International Group. It trades about 0.03 of its potential returns per unit of risk. Babcock International Group is currently generating about 0.06 per unit of risk. If you would invest 15.00 in Concrete Pumping Holdings on August 31, 2024 and sell it today you would lose (12.10) from holding Concrete Pumping Holdings or give up 80.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 32.45% |
| Values | Daily Returns |
Concrete Pumping Holdings vs. Babcock International Group
Performance |
| Timeline |
| Concrete Pumping Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Babcock International |
Concrete Pumping and Babcock International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concrete Pumping and Babcock International
The main advantage of trading using opposite Concrete Pumping and Babcock International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concrete Pumping position performs unexpectedly, Babcock International 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 Babcock International will offset losses from the drop in Babcock International's long position.| Concrete Pumping vs. Diamond Estates Wines | Concrete Pumping vs. CF Industries Holdings | Concrete Pumping vs. Hawkins | Concrete Pumping vs. Hudson Technologies |
| Babcock International vs. Orion Group Holdings | Babcock International vs. Agrify Corp | Babcock International vs. Matrix Service Co | Babcock International vs. MYR 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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