Correlation Between Mueller Industries and Ampco Pittsburgh
Can any of the company-specific risk be diversified away by investing in both Mueller Industries 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 Mueller Industries and Ampco Pittsburgh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mueller Industries and Ampco Pittsburgh, you can compare the effects of market volatilities on Mueller Industries 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 Mueller Industries with a short position of Ampco Pittsburgh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mueller Industries and Ampco Pittsburgh.
Diversification Opportunities for Mueller Industries and Ampco Pittsburgh
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mueller and Ampco is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Mueller Industries and Ampco Pittsburgh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampco Pittsburgh and Mueller Industries 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 Mueller Industries 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 Mueller Industries i.e., Mueller Industries and Ampco Pittsburgh go up and down completely randomly.
Pair Corralation between Mueller Industries and Ampco Pittsburgh
Considering the 90-day investment horizon Mueller Industries is expected to generate 0.65 times more return on investment than Ampco Pittsburgh. However, Mueller Industries is 1.54 times less risky than Ampco Pittsburgh. It trades about 0.2 of its potential returns per unit of risk. Ampco Pittsburgh is currently generating about -0.01 per unit of risk. If you would invest 8,100 in Mueller Industries on August 24, 2024 and sell it today you would earn a total of 1,070 from holding Mueller Industries or generate 13.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mueller Industries vs. Ampco Pittsburgh
Performance |
| Timeline |
| Mueller Industries |
| Ampco Pittsburgh |
Mueller Industries and Ampco Pittsburgh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mueller Industries and Ampco Pittsburgh
The main advantage of trading using opposite Mueller Industries and Ampco Pittsburgh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mueller Industries 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.| Mueller Industries vs. Insteel Industries | Mueller Industries vs. Carpenter Technology | Mueller Industries vs. Haynes International | Mueller Industries vs. Northwest Pipe |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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