Correlation Between Oshkosh and AGCO
Can any of the company-specific risk be diversified away by investing in both Oshkosh and AGCO 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 Oshkosh and AGCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oshkosh and AGCO Corporation, you can compare the effects of market volatilities on Oshkosh and AGCO 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 Oshkosh with a short position of AGCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oshkosh and AGCO.
Diversification Opportunities for Oshkosh and AGCO
Significant diversification
The 3 months correlation between Oshkosh and AGCO is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Oshkosh and AGCO Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGCO and Oshkosh 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 Oshkosh are associated (or correlated) with AGCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGCO has no effect on the direction of Oshkosh i.e., Oshkosh and AGCO go up and down completely randomly.
Pair Corralation between Oshkosh and AGCO
Considering the 90-day investment horizon Oshkosh is expected to generate 1.01 times more return on investment than AGCO. However, Oshkosh is 1.01 times more volatile than AGCO Corporation. It trades about 0.11 of its potential returns per unit of risk. AGCO Corporation is currently generating about -0.02 per unit of risk. If you would invest 10,302 in Oshkosh on August 24, 2024 and sell it today you would earn a total of 631.00 from holding Oshkosh or generate 6.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oshkosh vs. AGCO Corp.
Performance |
| Timeline |
| Oshkosh |
| AGCO |
Oshkosh and AGCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oshkosh and AGCO
The main advantage of trading using opposite Oshkosh and AGCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oshkosh position performs unexpectedly, AGCO 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 AGCO will offset losses from the drop in AGCO's long position.| Oshkosh vs. Terex | Oshkosh vs. Astec Industries | Oshkosh vs. Hyster Yale Materials Handling | Oshkosh vs. Manitex International |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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