Correlation Between Limbach Holdings and ACS Actividades
Can any of the company-specific risk be diversified away by investing in both Limbach Holdings and ACS Actividades 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 Limbach Holdings and ACS Actividades into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Limbach Holdings and ACS Actividades de, you can compare the effects of market volatilities on Limbach Holdings and ACS Actividades 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 Limbach Holdings with a short position of ACS Actividades. Check out your portfolio center. Please also check ongoing floating volatility patterns of Limbach Holdings and ACS Actividades.
Diversification Opportunities for Limbach Holdings and ACS Actividades
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Limbach and ACS is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Limbach Holdings and ACS Actividades de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACS Actividades de and Limbach Holdings 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 Limbach Holdings are associated (or correlated) with ACS Actividades. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACS Actividades de has no effect on the direction of Limbach Holdings i.e., Limbach Holdings and ACS Actividades go up and down completely randomly.
Pair Corralation between Limbach Holdings and ACS Actividades
Considering the 90-day investment horizon Limbach Holdings is expected to generate 35.0 times more return on investment than ACS Actividades. However, Limbach Holdings is 35.0 times more volatile than ACS Actividades de. It trades about 0.2 of its potential returns per unit of risk. ACS Actividades de is currently generating about 0.15 per unit of risk. If you would invest 7,472 in Limbach Holdings on August 28, 2024 and sell it today you would earn a total of 2,777 from holding Limbach Holdings or generate 37.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Limbach Holdings vs. ACS Actividades de
Performance |
| Timeline |
| Limbach Holdings |
| ACS Actividades de |
Limbach Holdings and ACS Actividades Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Limbach Holdings and ACS Actividades
The main advantage of trading using opposite Limbach Holdings and ACS Actividades positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Limbach Holdings position performs unexpectedly, ACS Actividades 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 ACS Actividades will offset losses from the drop in ACS Actividades' long position.| Limbach Holdings vs. MYR Group | Limbach Holdings vs. Granite Construction Incorporated | Limbach Holdings vs. Construction Partners | Limbach Holdings vs. Great Lakes Dredge |
| ACS Actividades vs. Acciona SA | ACS Actividades vs. JGC Corp | ACS Actividades vs. ACS Actividades De | ACS Actividades vs. Arcadis NV |
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 Stocks Directory module to find actively traded stocks across global markets.
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