Correlation Between Manhattan Associates and Alarm Holdings
Can any of the company-specific risk be diversified away by investing in both Manhattan Associates and Alarm Holdings 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 Manhattan Associates and Alarm Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manhattan Associates and Alarm Holdings, you can compare the effects of market volatilities on Manhattan Associates and Alarm Holdings 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 Manhattan Associates with a short position of Alarm Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manhattan Associates and Alarm Holdings.
Diversification Opportunities for Manhattan Associates and Alarm Holdings
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Manhattan and Alarm is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Manhattan Associates and Alarm Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alarm Holdings and Manhattan Associates 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 Manhattan Associates are associated (or correlated) with Alarm Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alarm Holdings has no effect on the direction of Manhattan Associates i.e., Manhattan Associates and Alarm Holdings go up and down completely randomly.
Pair Corralation between Manhattan Associates and Alarm Holdings
Given the investment horizon of 90 days Manhattan Associates is expected to generate 3.09 times less return on investment than Alarm Holdings. But when comparing it to its historical volatility, Manhattan Associates is 1.48 times less risky than Alarm Holdings. It trades about 0.13 of its potential returns per unit of risk. Alarm Holdings is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 5,463 in Alarm Holdings on August 28, 2024 and sell it today you would earn a total of 1,023 from holding Alarm Holdings or generate 18.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manhattan Associates vs. Alarm Holdings
Performance |
| Timeline |
| Manhattan Associates |
| Alarm Holdings |
Manhattan Associates and Alarm Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manhattan Associates and Alarm Holdings
The main advantage of trading using opposite Manhattan Associates and Alarm Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manhattan Associates position performs unexpectedly, Alarm Holdings 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 Alarm Holdings will offset losses from the drop in Alarm Holdings' long position.| Manhattan Associates vs. Blackbaud | Manhattan Associates vs. Bentley Systems | Manhattan Associates vs. Paylocity Holdng | Manhattan Associates vs. ANSYS Inc |
| Alarm Holdings vs. Paycor HCM | Alarm Holdings vs. Appfolio | Alarm Holdings vs. Agilysys | Alarm Holdings vs. Alkami Technology |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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