Correlation Between Columbus McKinnon and Alamo
Can any of the company-specific risk be diversified away by investing in both Columbus McKinnon and Alamo 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 Columbus McKinnon and Alamo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbus McKinnon and Alamo Group, you can compare the effects of market volatilities on Columbus McKinnon and Alamo 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 Columbus McKinnon with a short position of Alamo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbus McKinnon and Alamo.
Diversification Opportunities for Columbus McKinnon and Alamo
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Columbus and Alamo is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Columbus McKinnon and Alamo Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamo Group and Columbus McKinnon 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 Columbus McKinnon are associated (or correlated) with Alamo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alamo Group has no effect on the direction of Columbus McKinnon i.e., Columbus McKinnon and Alamo go up and down completely randomly.
Pair Corralation between Columbus McKinnon and Alamo
Given the investment horizon of 90 days Columbus McKinnon is expected to under-perform the Alamo. In addition to that, Columbus McKinnon is 8.21 times more volatile than Alamo Group. It trades about -0.23 of its total potential returns per unit of risk. Alamo Group is currently generating about 0.06 per unit of volatility. If you would invest 18,235 in Alamo Group on November 18, 2024 and sell it today you would earn a total of 221.00 from holding Alamo Group or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbus McKinnon vs. Alamo Group
Performance |
| Timeline |
| Columbus McKinnon |
| Alamo Group |
Columbus McKinnon and Alamo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbus McKinnon and Alamo
The main advantage of trading using opposite Columbus McKinnon and Alamo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbus McKinnon position performs unexpectedly, Alamo 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 Alamo will offset losses from the drop in Alamo's long position.| Columbus McKinnon vs. Lindsay | Columbus McKinnon vs. Astec Industries | Columbus McKinnon vs. Shyft Group | Columbus McKinnon vs. AGCO Corporation |
| Alamo vs. Hyster Yale Materials Handling | Alamo vs. Columbus McKinnon | Alamo vs. AGCO Corporation | Alamo vs. Titan International |
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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