Correlation Between Ameresco and Tutor Perini

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

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

Diversification Opportunities for Ameresco and Tutor Perini

-0.45

Correlation Coefficient

Ameresco  Tutor Perini

Very good diversification

The 3 months correlation between Ameresco and Tutor is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ameresco and Tutor Perini in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tutor Perini and Ameresco 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 Ameresco are associated (or correlated) with Tutor Perini. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tutor Perini has no effect on the direction of Ameresco i.e., Ameresco and Tutor Perini go up and down completely randomly.

Pair Corralation between Ameresco and Tutor Perini

Given the investment horizon of 90 days Ameresco is expected to under-perform the Tutor Perini. In addition to that, Ameresco is 1.1 times more volatile than Tutor Perini. It trades about -0.02 of its total potential returns per unit of risk. Tutor Perini is currently generating about 0.06 per unit of volatility. If you would invest  2,122  in Tutor Perini on September 15, 2024 and sell it today you would earn a total of  498.00  from holding Tutor Perini or generate 23.47% return on investment over 90 days.

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

Ameresco  vs.  Tutor Perini

Ameresco

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ameresco has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Tutor Perini

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tutor Perini are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Tutor Perini exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ameresco and Tutor Perini

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

The idea behind Ameresco and Tutor Perini 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.