Correlation Between Alta Equipment and Okeanis Eco

Can any of the company-specific risk be diversified away by investing in both Alta Equipment and Okeanis Eco 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 Alta Equipment and Okeanis Eco into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alta Equipment Group and Okeanis Eco Tankers, you can compare the effects of market volatilities on Alta Equipment and Okeanis Eco 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 Alta Equipment with a short position of Okeanis Eco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alta Equipment and Okeanis Eco.

Diversification Opportunities for Alta Equipment and Okeanis Eco

-0.22

Correlation Coefficient

Alta Equipment  Okeanis Eco

Very good diversification

The 3 months correlation between Alta and Okeanis is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Alta Equipment Group and Okeanis Eco Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okeanis Eco Tankers and Alta Equipment 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 Alta Equipment Group are associated (or correlated) with Okeanis Eco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Okeanis Eco Tankers has no effect on the direction of Alta Equipment i.e., Alta Equipment and Okeanis Eco go up and down completely randomly.

Pair Corralation between Alta Equipment and Okeanis Eco

Given the investment horizon of 90 days Alta Equipment Group is expected to under-perform the Okeanis Eco. But the stock apears to be less risky and, when comparing its historical volatility, Alta Equipment Group is 1.09 times less risky than Okeanis Eco. The stock trades about -0.02 of its potential returns per unit of risk. The Okeanis Eco Tankers is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,309  in Okeanis Eco Tankers on October 25, 2024 and sell it today you would earn a total of  983.00  from holding Okeanis Eco Tankers or generate 75.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	68.83%
Values	Daily Returns

Alta Equipment Group  vs.  Okeanis Eco Tankers

Alta Equipment Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alta Equipment Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Alta Equipment reported solid returns over the last few months and may actually be approaching a breakup point.

Okeanis Eco Tankers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Okeanis Eco Tankers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Alta Equipment and Okeanis Eco

The main advantage of trading using opposite Alta Equipment and Okeanis Eco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alta Equipment position performs unexpectedly, Okeanis Eco 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 Okeanis Eco will offset losses from the drop in Okeanis Eco's long position.

The idea behind Alta Equipment Group and Okeanis Eco Tankers 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.

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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.