Correlation Between Inflection Point and Alta Equipment
Can any of the company-specific risk be diversified away by investing in both Inflection Point and Alta Equipment 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 Inflection Point and Alta Equipment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflection Point Acquisition and Alta Equipment Group, you can compare the effects of market volatilities on Inflection Point and Alta Equipment 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 Inflection Point with a short position of Alta Equipment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflection Point and Alta Equipment.
Diversification Opportunities for Inflection Point and Alta Equipment
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Inflection and Alta is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition and Alta Equipment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alta Equipment Group and Inflection Point 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 Inflection Point Acquisition are associated (or correlated) with Alta Equipment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alta Equipment Group has no effect on the direction of Inflection Point i.e., Inflection Point and Alta Equipment go up and down completely randomly.
Pair Corralation between Inflection Point and Alta Equipment
Assuming the 90 days horizon Inflection Point is expected to generate 16.74 times less return on investment than Alta Equipment. But when comparing it to its historical volatility, Inflection Point Acquisition is 18.49 times less risky than Alta Equipment. It trades about 0.22 of its potential returns per unit of risk. Alta Equipment Group is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 655.00 in Alta Equipment Group on September 2, 2024 and sell it today you would earn a total of 136.00 from holding Alta Equipment Group or generate 20.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inflection Point Acquisition vs. Alta Equipment Group
Performance |
| Timeline |
| Inflection Point Acq |
| Alta Equipment Group |
Inflection Point and Alta Equipment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflection Point and Alta Equipment
The main advantage of trading using opposite Inflection Point and Alta Equipment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflection Point position performs unexpectedly, Alta Equipment 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 Alta Equipment will offset losses from the drop in Alta Equipment's long position.| Inflection Point vs. Kinsale Capital Group | Inflection Point vs. GoHealth | Inflection Point vs. Stratasys | Inflection Point vs. NI Holdings |
| Alta Equipment vs. PROG Holdings | Alta Equipment vs. GATX Corporation | Alta Equipment vs. McGrath RentCorp | Alta Equipment vs. Custom Truck One |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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