Correlation Between HE Equipment and ACG Metals
Can any of the company-specific risk be diversified away by investing in both HE Equipment and ACG Metals 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 HE Equipment and ACG Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HE Equipment Services and ACG Metals Limited, you can compare the effects of market volatilities on HE Equipment and ACG Metals 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 HE Equipment with a short position of ACG Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of HE Equipment and ACG Metals.
Diversification Opportunities for HE Equipment and ACG Metals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HEES and ACG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HE Equipment Services and ACG Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACG Metals Limited and HE Equipment 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 HE Equipment Services are associated (or correlated) with ACG Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACG Metals Limited has no effect on the direction of HE Equipment i.e., HE Equipment and ACG Metals go up and down completely randomly.
Pair Corralation between HE Equipment and ACG Metals
If you would invest 4,784 in HE Equipment Services on September 3, 2024 and sell it today you would earn a total of 1,190 from holding HE Equipment Services or generate 24.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HE Equipment Services vs. ACG Metals Limited
Performance |
| Timeline |
| HE Equipment Services |
| ACG Metals Limited |
HE Equipment and ACG Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HE Equipment and ACG Metals
The main advantage of trading using opposite HE Equipment and ACG Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HE Equipment position performs unexpectedly, ACG Metals 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 ACG Metals will offset losses from the drop in ACG Metals' long position.| HE Equipment vs. GATX Corporation | HE Equipment vs. McGrath RentCorp | HE Equipment vs. Alta Equipment Group | HE Equipment vs. Ryder System |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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