Correlation Between Columbus McKinnon and Saker Aviation
Can any of the company-specific risk be diversified away by investing in both Columbus McKinnon and Saker Aviation 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 Saker Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbus McKinnon and Saker Aviation Services, you can compare the effects of market volatilities on Columbus McKinnon and Saker Aviation 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 Saker Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbus McKinnon and Saker Aviation.
Diversification Opportunities for Columbus McKinnon and Saker Aviation
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Columbus and Saker is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Columbus McKinnon and Saker Aviation Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saker Aviation Services 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 Saker Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saker Aviation Services has no effect on the direction of Columbus McKinnon i.e., Columbus McKinnon and Saker Aviation go up and down completely randomly.
Pair Corralation between Columbus McKinnon and Saker Aviation
Given the investment horizon of 90 days Columbus McKinnon is expected to generate 0.37 times more return on investment than Saker Aviation. However, Columbus McKinnon is 2.73 times less risky than Saker Aviation. It trades about 0.1 of its potential returns per unit of risk. Saker Aviation Services is currently generating about -0.07 per unit of risk. If you would invest 3,593 in Columbus McKinnon on August 30, 2024 and sell it today you would earn a total of 317.00 from holding Columbus McKinnon or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbus McKinnon vs. Saker Aviation Services
Performance |
| Timeline |
| Columbus McKinnon |
| Saker Aviation Services |
Columbus McKinnon and Saker Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbus McKinnon and Saker Aviation
The main advantage of trading using opposite Columbus McKinnon and Saker Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbus McKinnon position performs unexpectedly, Saker Aviation 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 Saker Aviation will offset losses from the drop in Saker Aviation's long position.| Columbus McKinnon vs. Lindsay | Columbus McKinnon vs. Astec Industries | Columbus McKinnon vs. Shyft Group | Columbus McKinnon vs. AGCO Corporation |
| Saker Aviation vs. Deere Company | Saker Aviation vs. Columbus McKinnon | Saker Aviation vs. Hyster Yale Materials Handling | Saker Aviation vs. Manitowoc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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