Correlation Between Lightning EMotors and Alamo
Can any of the company-specific risk be diversified away by investing in both Lightning EMotors and Alamo 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 Lightning EMotors and Alamo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lightning EMotors and Alamo Group, you can compare the effects of market volatilities on Lightning EMotors and Alamo 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 Lightning EMotors with a short position of Alamo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lightning EMotors and Alamo.
Diversification Opportunities for Lightning EMotors and Alamo
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lightning and Alamo is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lightning EMotors and Alamo Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamo Group and Lightning EMotors 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 Lightning EMotors are associated (or correlated) with Alamo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alamo Group has no effect on the direction of Lightning EMotors i.e., Lightning EMotors and Alamo go up and down completely randomly.
Pair Corralation between Lightning EMotors and Alamo
If you would invest 17,522 in Alamo Group on September 12, 2024 and sell it today you would earn a total of 2,052 from holding Alamo Group or generate 11.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.59% |
| Values | Daily Returns |
Lightning EMotors vs. Alamo Group
Performance |
| Timeline |
| Lightning EMotors |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Alamo Group |
Lightning EMotors and Alamo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lightning EMotors and Alamo
The main advantage of trading using opposite Lightning EMotors and Alamo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lightning EMotors position performs unexpectedly, Alamo 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 Alamo will offset losses from the drop in Alamo's long position.| Lightning EMotors vs. Lion Electric Corp | Lightning EMotors vs. American Premium Water | Lightning EMotors vs. Wabash National | Lightning EMotors vs. Titan International |
| Alamo vs. Victory Integrity Smallmid Cap | Alamo vs. Hilton Worldwide Holdings | Alamo vs. NVIDIA | Alamo vs. JPMorgan Chase Co |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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