Correlation Between Mammoth Energy and Alliance Global
Can any of the company-specific risk be diversified away by investing in both Mammoth Energy and Alliance Global 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 Mammoth Energy and Alliance Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mammoth Energy Services and Alliance Global Group, you can compare the effects of market volatilities on Mammoth Energy and Alliance Global 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 Mammoth Energy with a short position of Alliance Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mammoth Energy and Alliance Global.
Diversification Opportunities for Mammoth Energy and Alliance Global
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mammoth and Alliance is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Mammoth Energy Services and Alliance Global Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Global Group and Mammoth Energy 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 Mammoth Energy Services are associated (or correlated) with Alliance Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Global Group has no effect on the direction of Mammoth Energy i.e., Mammoth Energy and Alliance Global go up and down completely randomly.
Pair Corralation between Mammoth Energy and Alliance Global
Given the investment horizon of 90 days Mammoth Energy Services is expected to under-perform the Alliance Global. But the stock apears to be less risky and, when comparing its historical volatility, Mammoth Energy Services is 1.75 times less risky than Alliance Global. The stock trades about -0.21 of its potential returns per unit of risk. The Alliance Global Group is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 731.00 in Alliance Global Group on November 18, 2024 and sell it today you would lose (78.00) from holding Alliance Global Group or give up 10.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mammoth Energy Services vs. Alliance Global Group
Performance |
| Timeline |
| Mammoth Energy Services |
| Alliance Global Group |
Mammoth Energy and Alliance Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mammoth Energy and Alliance Global
The main advantage of trading using opposite Mammoth Energy and Alliance Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mammoth Energy position performs unexpectedly, Alliance Global 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 Alliance Global will offset losses from the drop in Alliance Global's long position.| Mammoth Energy vs. Matthews International | Mammoth Energy vs. Griffon | Mammoth Energy vs. Steel Partners Holdings | Mammoth Energy vs. Compass Diversified Holdings |
| Alliance Global vs. Alliance Recovery | Alliance Global vs. Ayala | Alliance Global vs. Alaska Power Telephone | Alliance Global vs. RCABS Inc |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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