Correlation Between Columbus McKinnon and AB Volvo
Can any of the company-specific risk be diversified away by investing in both Columbus McKinnon and AB Volvo 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 AB Volvo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbus McKinnon and AB Volvo, you can compare the effects of market volatilities on Columbus McKinnon and AB Volvo 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 AB Volvo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbus McKinnon and AB Volvo.
Diversification Opportunities for Columbus McKinnon and AB Volvo
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Columbus and VOLAF is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Columbus McKinnon and AB Volvo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Volvo 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 AB Volvo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Volvo has no effect on the direction of Columbus McKinnon i.e., Columbus McKinnon and AB Volvo go up and down completely randomly.
Pair Corralation between Columbus McKinnon and AB Volvo
Given the investment horizon of 90 days Columbus McKinnon is expected to generate 1.97 times less return on investment than AB Volvo. But when comparing it to its historical volatility, Columbus McKinnon is 1.05 times less risky than AB Volvo. It trades about 0.03 of its potential returns per unit of risk. AB Volvo is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,987 in AB Volvo on August 31, 2024 and sell it today you would earn a total of 589.00 from holding AB Volvo or generate 29.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 71.07% |
| Values | Daily Returns |
Columbus McKinnon vs. AB Volvo
Performance |
| Timeline |
| Columbus McKinnon |
| AB Volvo |
Columbus McKinnon and AB Volvo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbus McKinnon and AB Volvo
The main advantage of trading using opposite Columbus McKinnon and AB Volvo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbus McKinnon position performs unexpectedly, AB Volvo 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 AB Volvo will offset losses from the drop in AB Volvo's long position.| Columbus McKinnon vs. Lindsay | Columbus McKinnon vs. Astec Industries | Columbus McKinnon vs. Shyft Group | Columbus McKinnon vs. AGCO Corporation |
| AB Volvo vs. American Premium Water | AB Volvo vs. AmeraMex International | AB Volvo vs. Arts Way Manufacturing Co | AB Volvo vs. Astec Industries |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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