Correlation Between Alta Equipment and HyreCar

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

Diversification Opportunities for Alta Equipment and HyreCar

-0.52

Correlation Coefficient

Alta Equipment  HyreCar

Excellent diversification

The 3 months correlation between Alta and HyreCar is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Alta Equipment Group and HyreCar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HyreCar 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 HyreCar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HyreCar has no effect on the direction of Alta Equipment i.e., Alta Equipment and HyreCar go up and down completely randomly.

Pair Corralation between Alta Equipment and HyreCar

Given the investment horizon of 90 days Alta Equipment Group is expected to under-perform the HyreCar. But the stock apears to be less risky and, when comparing its historical volatility, Alta Equipment Group is 13.31 times less risky than HyreCar. The stock trades about -0.01 of its potential returns per unit of risk. The HyreCar is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  38.00  in HyreCar on September 17, 2024 and sell it today you would lose (38.00) from holding HyreCar or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Alta Equipment Group  vs.  HyreCar

Alta Equipment Group

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alta Equipment Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Alta Equipment reported solid returns over the last few months and may actually be approaching a breakup point.

HyreCar

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HyreCar has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Alta Equipment and HyreCar

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

The idea behind Alta Equipment Group and HyreCar 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.