Correlation Between AAON and Ampco Pittsburgh
Can any of the company-specific risk be diversified away by investing in both AAON 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 AAON and Ampco Pittsburgh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAON Inc and Ampco Pittsburgh, you can compare the effects of market volatilities on AAON 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 AAON with a short position of Ampco Pittsburgh. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAON and Ampco Pittsburgh.
Diversification Opportunities for AAON and Ampco Pittsburgh
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AAON and Ampco is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding AAON Inc and Ampco Pittsburgh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampco Pittsburgh and AAON 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 AAON Inc 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 AAON i.e., AAON and Ampco Pittsburgh go up and down completely randomly.
Pair Corralation between AAON and Ampco Pittsburgh
Given the investment horizon of 90 days AAON Inc is expected to generate 0.38 times more return on investment than Ampco Pittsburgh. However, AAON Inc is 2.6 times less risky than Ampco Pittsburgh. It trades about 0.01 of its potential returns per unit of risk. Ampco Pittsburgh is currently generating about -0.08 per unit of risk. If you would invest 8,533 in AAON Inc on January 20, 2024 and sell it today you would lose (9.00) from holding AAON Inc or give up 0.11% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
AAON Inc vs. Ampco Pittsburgh
Performance |
Timeline |
AAON Inc |
Ampco Pittsburgh |
AAON and Ampco Pittsburgh Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AAON and Ampco Pittsburgh
The main advantage of trading using opposite AAON and Ampco Pittsburgh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAON 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.AAON vs. Travis Perkins plc | AAON vs. Travis Perkins PLC | AAON vs. Janus International Group | AAON vs. Interface |
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Check out your portfolio center.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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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