Correlation Between Ampco Pittsburgh and Mayville Engineering

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

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

Diversification Opportunities for Ampco Pittsburgh and Mayville Engineering

-0.07

Correlation Coefficient

Ampco Pittsburgh  Mayville Engineering

Good diversification

The 3 months correlation between Ampco and Mayville is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ampco Pittsburgh and Mayville Engineering Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayville Engineering and Ampco Pittsburgh 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 Ampco Pittsburgh are associated (or correlated) with Mayville Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mayville Engineering has no effect on the direction of Ampco Pittsburgh i.e., Ampco Pittsburgh and Mayville Engineering go up and down completely randomly.

Pair Corralation between Ampco Pittsburgh and Mayville Engineering

Allowing for the 90-day total investment horizon Ampco Pittsburgh is expected to generate 1.29 times more return on investment than Mayville Engineering. However, Ampco Pittsburgh is 1.29 times more volatile than Mayville Engineering Co. It trades about 0.04 of its potential returns per unit of risk. Mayville Engineering Co is currently generating about -0.04 per unit of risk. If you would invest  198.00  in Ampco Pittsburgh on September 13, 2024 and sell it today you would earn a total of  11.00  from holding Ampco Pittsburgh or generate 5.56% return on investment over 90 days.

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

Ampco Pittsburgh  vs.  Mayville Engineering Co

Ampco Pittsburgh

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ampco Pittsburgh are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Ampco Pittsburgh may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Mayville Engineering

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mayville Engineering Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Ampco Pittsburgh and Mayville Engineering

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

The idea behind Ampco Pittsburgh and Mayville Engineering Co 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.