Correlation Between John Bean and Ametek
Can any of the company-specific risk be diversified away by investing in both John Bean and Ametek 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 John Bean and Ametek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Bean Technologies and Ametek Inc, you can compare the effects of market volatilities on John Bean and Ametek 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 John Bean with a short position of Ametek. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Bean and Ametek.
Diversification Opportunities for John Bean and Ametek
Poor diversification
The 3 months correlation between John and Ametek is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding John Bean Technologies and Ametek Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ametek Inc and John Bean 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 John Bean Technologies are associated (or correlated) with Ametek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ametek Inc has no effect on the direction of John Bean i.e., John Bean and Ametek go up and down completely randomly.
Pair Corralation between John Bean and Ametek
Considering the 90-day investment horizon John Bean Technologies is expected to generate 1.59 times more return on investment than Ametek. However, John Bean is 1.59 times more volatile than Ametek Inc. It trades about 0.05 of its potential returns per unit of risk. Ametek Inc is currently generating about 0.04 per unit of risk. If you would invest 10,116 in John Bean Technologies on August 27, 2024 and sell it today you would earn a total of 1,953 from holding John Bean Technologies or generate 19.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Bean Technologies vs. Ametek Inc
Performance |
| Timeline |
| John Bean Technologies |
| Ametek Inc |
John Bean and Ametek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Bean and Ametek
The main advantage of trading using opposite John Bean and Ametek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Bean position performs unexpectedly, Ametek 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 Ametek will offset losses from the drop in Ametek's long position.| John Bean vs. Aquagold International | John Bean vs. Morningstar Unconstrained Allocation | John Bean vs. High Yield Municipal Fund | John Bean vs. Thrivent High Yield |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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