Correlation Between Alkyl Amines and SP Plus

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

By analyzing existing cross correlation between Alkyl Amines Chemicals and SP Plus Corp, you can compare the effects of market volatilities on Alkyl Amines and SP Plus 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 Alkyl Amines with a short position of SP Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alkyl Amines and SP Plus.

Diversification Opportunities for Alkyl Amines and SP Plus

-0.26

Correlation Coefficient

Alkyl Amines  SP Plus

Very good diversification

The 3 months correlation between Alkyl and SP Plus is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Alkyl Amines Chemicals and SP Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP Plus Corp and Alkyl Amines 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 Alkyl Amines Chemicals are associated (or correlated) with SP Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP Plus Corp has no effect on the direction of Alkyl Amines i.e., Alkyl Amines and SP Plus go up and down completely randomly.

Pair Corralation between Alkyl Amines and SP Plus

Assuming the 90 days trading horizon Alkyl Amines Chemicals is expected to under-perform the SP Plus. In addition to that, Alkyl Amines is 2.98 times more volatile than SP Plus Corp. It trades about -0.16 of its total potential returns per unit of risk. SP Plus Corp is currently generating about -0.09 per unit of volatility. If you would invest  5,205  in SP Plus Corp on February 4, 2024 and sell it today you would lose (55.00) from holding SP Plus Corp or give up 1.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.91%
Values	Daily Returns

Alkyl Amines Chemicals  vs.  SP Plus Corp

Alkyl Amines Chemicals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alkyl Amines Chemicals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

SP Plus Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SP Plus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, SP Plus is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Alkyl Amines and SP Plus

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

The idea behind Alkyl Amines Chemicals and SP Plus Corp 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.