Correlation Between SG Blocks and Ampco Pittsburgh

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

By analyzing existing cross correlation between SG Blocks and Ampco Pittsburgh, you can compare the effects of market volatilities on SG Blocks and Ampco Pittsburgh 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 SG Blocks with a short position of Ampco Pittsburgh. Check out your portfolio center. Please also check ongoing floating volatility patterns of SG Blocks and Ampco Pittsburgh.

Diversification Opportunities for SG Blocks and Ampco Pittsburgh

-0.36

Correlation Coefficient

SG Blocks  Ampco Pittsburgh

Very good diversification

The 3 months correlation between SGBX and Ampco is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding SG Blocks and Ampco Pittsburgh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampco Pittsburgh and SG Blocks 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 SG Blocks are associated (or correlated) with Ampco Pittsburgh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampco Pittsburgh has no effect on the direction of SG Blocks i.e., SG Blocks and Ampco Pittsburgh go up and down completely randomly.

Pair Corralation between SG Blocks and Ampco Pittsburgh

Given the investment horizon of 90 days SG Blocks is expected to under-perform the Ampco Pittsburgh. In addition to that, SG Blocks is 1.9 times more volatile than Ampco Pittsburgh. It trades about -0.03 of its total potential returns per unit of risk. Ampco Pittsburgh is currently generating about 0.01 per unit of volatility. If you would invest  335.00  in Ampco Pittsburgh on October 4, 2024 and sell it today you would lose (112.00) from holding Ampco Pittsburgh or give up 33.43% of portfolio value over 90 days.

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

SG Blocks  vs.  Ampco Pittsburgh

SG Blocks

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SG Blocks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Ampco Pittsburgh

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ampco Pittsburgh are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Ampco Pittsburgh reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SG Blocks and Ampco Pittsburgh

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

The idea behind SG Blocks and Ampco Pittsburgh 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.