Correlation Between Columbus McKinnon and Blue Bird
Can any of the company-specific risk be diversified away by investing in both Columbus McKinnon and Blue Bird 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 Blue Bird into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbus McKinnon and Blue Bird Corp, you can compare the effects of market volatilities on Columbus McKinnon and Blue Bird 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 Blue Bird. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbus McKinnon and Blue Bird.
Diversification Opportunities for Columbus McKinnon and Blue Bird
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Columbus and Blue is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Columbus McKinnon and Blue Bird Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Bird Corp 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 Blue Bird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Bird Corp has no effect on the direction of Columbus McKinnon i.e., Columbus McKinnon and Blue Bird go up and down completely randomly.
Pair Corralation between Columbus McKinnon and Blue Bird
Given the investment horizon of 90 days Columbus McKinnon is expected to generate 7.33 times less return on investment than Blue Bird. But when comparing it to its historical volatility, Columbus McKinnon is 1.62 times less risky than Blue Bird. It trades about 0.03 of its potential returns per unit of risk. Blue Bird Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,797 in Blue Bird Corp on August 24, 2024 and sell it today you would earn a total of 2,211 from holding Blue Bird Corp or generate 123.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbus McKinnon vs. Blue Bird Corp
Performance |
| Timeline |
| Columbus McKinnon |
| Blue Bird Corp |
Columbus McKinnon and Blue Bird Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbus McKinnon and Blue Bird
The main advantage of trading using opposite Columbus McKinnon and Blue Bird positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbus McKinnon position performs unexpectedly, Blue Bird 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 Blue Bird will offset losses from the drop in Blue Bird's long position.| Columbus McKinnon vs. Lindsay | Columbus McKinnon vs. Astec Industries | Columbus McKinnon vs. Shyft Group | Columbus McKinnon vs. AGCO Corporation |
| Blue Bird vs. Vicinity Motor Corp | Blue Bird vs. AYRO Inc | Blue Bird vs. Canoo Inc | Blue Bird vs. Hyzon Motors |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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