Correlation Between Api Group and Concrete Pumping

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

By analyzing existing cross correlation between Api Group Corp and Concrete Pumping Holdings, you can compare the effects of market volatilities on Api Group and Concrete Pumping 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 Api Group with a short position of Concrete Pumping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Api Group and Concrete Pumping.

Diversification Opportunities for Api Group and Concrete Pumping

0.32

Correlation Coefficient

Api Group  Concrete Pumping

Weak diversification

The 3 months correlation between Api and Concrete is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Api Group Corp and Concrete Pumping Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concrete Pumping Holdings and Api Group 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 Api Group Corp are associated (or correlated) with Concrete Pumping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concrete Pumping Holdings has no effect on the direction of Api Group i.e., Api Group and Concrete Pumping go up and down completely randomly.

Pair Corralation between Api Group and Concrete Pumping

Considering the 90-day investment horizon Api Group is expected to generate 1.78 times less return on investment than Concrete Pumping. But when comparing it to its historical volatility, Api Group Corp is 1.91 times less risky than Concrete Pumping. It trades about 0.07 of its potential returns per unit of risk. Concrete Pumping Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  613.00  in Concrete Pumping Holdings on November 29, 2024 and sell it today you would earn a total of  58.00  from holding Concrete Pumping Holdings or generate 9.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Api Group Corp  vs.  Concrete Pumping Holdings

Api Group Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Api Group Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Api Group may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Concrete Pumping Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Concrete Pumping Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal fundamental indicators, Concrete Pumping reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Api Group and Concrete Pumping

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

The idea behind Api Group Corp and Concrete Pumping Holdings 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.