Correlation Between Custom Truck and American Healthcare
Can any of the company-specific risk be diversified away by investing in both Custom Truck and American Healthcare 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 Custom Truck and American Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Custom Truck One and American Healthcare REIT,, you can compare the effects of market volatilities on Custom Truck and American Healthcare 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 Custom Truck with a short position of American Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Custom Truck and American Healthcare.
Diversification Opportunities for Custom Truck and American Healthcare
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Custom and American is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Custom Truck One and American Healthcare REIT, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Healthcare REIT, and Custom Truck 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 Custom Truck One are associated (or correlated) with American Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Healthcare REIT, has no effect on the direction of Custom Truck i.e., Custom Truck and American Healthcare go up and down completely randomly.
Pair Corralation between Custom Truck and American Healthcare
Given the investment horizon of 90 days Custom Truck One is expected to generate 2.15 times more return on investment than American Healthcare. However, Custom Truck is 2.15 times more volatile than American Healthcare REIT,. It trades about 0.2 of its potential returns per unit of risk. American Healthcare REIT, is currently generating about 0.32 per unit of risk. If you would invest 388.00 in Custom Truck One on August 31, 2024 and sell it today you would earn a total of 212.00 from holding Custom Truck One or generate 54.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Custom Truck One vs. American Healthcare REIT,
Performance |
| Timeline |
| Custom Truck One |
| American Healthcare REIT, |
Custom Truck and American Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Custom Truck and American Healthcare
The main advantage of trading using opposite Custom Truck and American Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Custom Truck position performs unexpectedly, American Healthcare 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 American Healthcare will offset losses from the drop in American Healthcare's long position.| Custom Truck vs. PROG Holdings | Custom Truck vs. McGrath RentCorp | Custom Truck vs. HE Equipment Services | Custom Truck vs. GATX Corporation |
| American Healthcare vs. Seadrill Limited | American Healthcare vs. Helmerich and Payne | American Healthcare vs. Western Acquisition Ventures | American Healthcare vs. Cedar Realty Trust |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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