Correlation Between Team and ALJ Regional
Can any of the company-specific risk be diversified away by investing in both Team and ALJ Regional 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 Team and ALJ Regional into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Team Inc and ALJ Regional Holdings, you can compare the effects of market volatilities on Team and ALJ Regional 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 Team with a short position of ALJ Regional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Team and ALJ Regional.
Diversification Opportunities for Team and ALJ Regional
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Team and ALJ is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Team Inc and ALJ Regional Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALJ Regional Holdings and Team 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 Team Inc are associated (or correlated) with ALJ Regional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALJ Regional Holdings has no effect on the direction of Team i.e., Team and ALJ Regional go up and down completely randomly.
Pair Corralation between Team and ALJ Regional
If you would invest 1,369 in Team Inc on November 3, 2024 and sell it today you would earn a total of 311.00 from holding Team Inc or generate 22.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Team Inc vs. ALJ Regional Holdings
Performance |
| Timeline |
| Team Inc |
| ALJ Regional Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Team and ALJ Regional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Team and ALJ Regional
The main advantage of trading using opposite Team and ALJ Regional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Team position performs unexpectedly, ALJ Regional 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 ALJ Regional will offset losses from the drop in ALJ Regional's long position.The idea behind Team Inc and ALJ Regional Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ALJ Regional vs. Dexterra Group | ALJ Regional vs. Intertek Group Plc | ALJ Regional vs. Wildpack Beverage | ALJ Regional vs. DATA Communications Management |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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