Correlation Between Alta Equipment and 532457BZ0

Can any of the company-specific risk be diversified away by investing in both Alta Equipment and 532457BZ0 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 532457BZ0 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 ELI LILLY AND, you can compare the effects of market volatilities on Alta Equipment and 532457BZ0 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 532457BZ0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alta Equipment and 532457BZ0.

Diversification Opportunities for Alta Equipment and 532457BZ0

-0.34

Correlation Coefficient

Alta Equipment  532457BZ0

Very good diversification

The 3 months correlation between Alta and 532457BZ0 is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Alta Equipment Group and ELI LILLY AND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELI LILLY AND 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 532457BZ0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELI LILLY AND has no effect on the direction of Alta Equipment i.e., Alta Equipment and 532457BZ0 go up and down completely randomly.

Pair Corralation between Alta Equipment and 532457BZ0

Given the investment horizon of 90 days Alta Equipment Group is expected to under-perform the 532457BZ0. In addition to that, Alta Equipment is 2.17 times more volatile than ELI LILLY AND. It trades about -0.03 of its total potential returns per unit of risk. ELI LILLY AND is currently generating about 0.01 per unit of volatility. If you would invest  6,696  in ELI LILLY AND on October 10, 2024 and sell it today you would earn a total of  109.00  from holding ELI LILLY AND or generate 1.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	83.84%
Values	Daily Returns

Alta Equipment Group  vs.  ELI LILLY AND

Alta Equipment Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alta Equipment Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Alta Equipment reported solid returns over the last few months and may actually be approaching a breakup point.

ELI LILLY AND

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ELI LILLY AND are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 532457BZ0 sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alta Equipment and 532457BZ0

The main advantage of trading using opposite Alta Equipment and 532457BZ0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alta Equipment position performs unexpectedly, 532457BZ0 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 532457BZ0 will offset losses from the drop in 532457BZ0's long position.

The idea behind Alta Equipment Group and ELI LILLY AND 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.