Correlation Between Mayville Engineering and Ampco Pittsburgh
Can any of the company-specific risk be diversified away by investing in both Mayville Engineering and Ampco Pittsburgh 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 Mayville Engineering and Ampco Pittsburgh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mayville Engineering Co and Ampco Pittsburgh, you can compare the effects of market volatilities on Mayville Engineering and Ampco Pittsburgh 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 Mayville Engineering with a short position of Ampco Pittsburgh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mayville Engineering and Ampco Pittsburgh.
Diversification Opportunities for Mayville Engineering and Ampco Pittsburgh
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mayville and Ampco is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Mayville Engineering Co and Ampco Pittsburgh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampco Pittsburgh and Mayville Engineering 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 Mayville Engineering Co are associated (or correlated) with Ampco Pittsburgh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampco Pittsburgh has no effect on the direction of Mayville Engineering i.e., Mayville Engineering and Ampco Pittsburgh go up and down completely randomly.
Pair Corralation between Mayville Engineering and Ampco Pittsburgh
Considering the 90-day investment horizon Mayville Engineering Co is expected to under-perform the Ampco Pittsburgh. In addition to that, Mayville Engineering is 1.25 times more volatile than Ampco Pittsburgh. It trades about -0.17 of its total potential returns per unit of risk. Ampco Pittsburgh is currently generating about -0.13 per unit of volatility. If you would invest 197.00 in Ampco Pittsburgh on August 27, 2024 and sell it today you would lose (24.00) from holding Ampco Pittsburgh or give up 12.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mayville Engineering Co vs. Ampco Pittsburgh
Performance |
| Timeline |
| Mayville Engineering |
| Ampco Pittsburgh |
Mayville Engineering and Ampco Pittsburgh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mayville Engineering and Ampco Pittsburgh
The main advantage of trading using opposite Mayville Engineering and Ampco Pittsburgh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mayville Engineering position performs unexpectedly, Ampco Pittsburgh 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 Ampco Pittsburgh will offset losses from the drop in Ampco Pittsburgh's long position.| Mayville Engineering vs. Haynes International | Mayville Engineering vs. Insteel Industries | Mayville Engineering vs. Gulf Island Fabrication | Mayville Engineering vs. ESAB Corp |
| Ampco Pittsburgh vs. Northwest Pipe | Ampco Pittsburgh vs. Insteel Industries | Ampco Pittsburgh vs. Carpenter Technology | Ampco Pittsburgh vs. ESAB Corp |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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