Correlation Between Autohellas and Alta Equipment

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

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

Diversification Opportunities for Autohellas and Alta Equipment

0.0

Correlation Coefficient

Autohellas  Alta Equipment

Pay attention - limited upside

The 3 months correlation between Autohellas and Alta is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Autohellas SA and Alta Equipment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alta Equipment Group and Autohellas 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 Autohellas SA are associated (or correlated) with Alta Equipment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alta Equipment Group has no effect on the direction of Autohellas i.e., Autohellas and Alta Equipment go up and down completely randomly.

Pair Corralation between Autohellas and Alta Equipment

If you would invest  2,498  in Alta Equipment Group on October 9, 2024 and sell it today you would earn a total of  62.00  from holding Alta Equipment Group or generate 2.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Autohellas SA  vs.  Alta Equipment Group

Autohellas SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Autohellas SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Autohellas is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Alta Equipment Group

Risk-Adjusted Performance

2 of 100

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 somewhat strong basic indicators, Alta Equipment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Autohellas and Alta Equipment

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

The idea behind Autohellas SA and Alta Equipment Group 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.