Correlation Between Alta Equipment and Gushen

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Can any of the company-specific risk be diversified away by investing in both Alta Equipment and Gushen 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 Gushen 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 Gushen Inc, you can compare the effects of market volatilities on Alta Equipment and Gushen 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 Gushen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alta Equipment and Gushen.

Diversification Opportunities for Alta Equipment and Gushen

0.17
  Correlation Coefficient

Average diversification

The 3 months correlation between Alta and Gushen is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Alta Equipment Group and Gushen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gushen Inc 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 Gushen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gushen Inc has no effect on the direction of Alta Equipment i.e., Alta Equipment and Gushen go up and down completely randomly.

Pair Corralation between Alta Equipment and Gushen

If you would invest  2,270  in Gushen Inc on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Gushen Inc or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy5.0%
ValuesDaily Returns

Alta Equipment Group  vs.  Gushen Inc

 Performance 
       Timeline  
Alta Equipment Group 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Alta Equipment Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Alta Equipment may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Gushen Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Gushen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, Gushen is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Alta Equipment and Gushen Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Alta Equipment and Gushen

The main advantage of trading using opposite Alta Equipment and Gushen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alta Equipment position performs unexpectedly, Gushen 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 Gushen will offset losses from the drop in Gushen's long position.
The idea behind Alta Equipment Group and Gushen Inc 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.
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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