Correlation Between Organic Sales and Alta Equipment

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

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

Diversification Opportunities for Organic Sales and Alta Equipment

0.0

Correlation Coefficient

Organic Sales  Alta Equipment

Pay attention - limited upside

The 3 months correlation between Organic and Alta is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Organic Sales and 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 Organic Sales 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 Organic Sales and 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 Organic Sales i.e., Organic Sales and Alta Equipment go up and down completely randomly.

Pair Corralation between Organic Sales and Alta Equipment

If you would invest  664.00  in Alta Equipment Group on September 4, 2024 and sell it today you would earn a total of  115.00  from holding Alta Equipment Group or generate 17.32% return on investment over 90 days.

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

Organic Sales and  vs.  Alta Equipment Group

Organic Sales

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Organic Sales and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Organic Sales is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Alta Equipment Group

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alta Equipment Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Alta Equipment reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Organic Sales and Alta Equipment

The main advantage of trading using opposite Organic Sales and Alta Equipment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Organic Sales 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.

The idea behind Organic Sales and and Alta Equipment Group 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.