Correlation Between Fortress Transp and Alta Equipment
Can any of the company-specific risk be diversified away by investing in both Fortress Transp 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 Fortress Transp and Alta Equipment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortress Transp Infra and Alta Equipment Group, you can compare the effects of market volatilities on Fortress Transp 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 Fortress Transp with a short position of Alta Equipment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Transp and Alta Equipment.
Diversification Opportunities for Fortress Transp and Alta Equipment
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fortress and Alta is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Transp Infra 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 Fortress Transp 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 Fortress Transp Infra 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 Fortress Transp i.e., Fortress Transp and Alta Equipment go up and down completely randomly.
Pair Corralation between Fortress Transp and Alta Equipment
Given the investment horizon of 90 days Fortress Transp Infra is expected to under-perform the Alta Equipment. In addition to that, Fortress Transp is 11.72 times more volatile than Alta Equipment Group. It trades about -0.02 of its total potential returns per unit of risk. Alta Equipment Group is currently generating about 0.08 per unit of volatility. If you would invest 2,492 in Alta Equipment Group on December 1, 2024 and sell it today you would earn a total of 70.00 from holding Alta Equipment Group or generate 2.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Fortress Transp Infra vs. Alta Equipment Group
Performance |
Timeline |
Fortress Transp Infra |
Alta Equipment Group |
Fortress Transp and Alta Equipment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fortress Transp and Alta Equipment
The main advantage of trading using opposite Fortress Transp and Alta Equipment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Transp 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.Fortress Transp vs. McGrath RentCorp | Fortress Transp vs. Custom Truck One | Fortress Transp vs. Herc Holdings | Fortress Transp vs. Alta Equipment Group |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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