Correlation Between Arconic and Ametek
Can any of the company-specific risk be diversified away by investing in both Arconic and Ametek 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 Arconic and Ametek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arconic and Ametek Inc, you can compare the effects of market volatilities on Arconic and Ametek 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 Arconic with a short position of Ametek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arconic and Ametek.
Diversification Opportunities for Arconic and Ametek
Almost no diversification
The 3 months correlation between Arconic and Ametek is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Arconic and Ametek Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ametek Inc and Arconic 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 Arconic are associated (or correlated) with Ametek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ametek Inc has no effect on the direction of Arconic i.e., Arconic and Ametek go up and down completely randomly.
Pair Corralation between Arconic and Ametek
If you would invest 17,844 in Ametek Inc on December 30, 2023 and sell it today you would earn a total of 446.00 from holding Ametek Inc or generate 2.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 4.55% |
Values | Daily Returns |
Arconic vs. Ametek Inc
Performance |
Timeline |
Arconic |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Ametek Inc |
Arconic and Ametek Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Arconic and Ametek
The main advantage of trading using opposite Arconic and Ametek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arconic position performs unexpectedly, Ametek 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 Ametek will offset losses from the drop in Ametek's long position.Arconic vs. Semtech | Arconic vs. Flexible Solutions International | Arconic vs. Ecolab Inc | Arconic vs. Arrow Electronics |
Ametek vs. Barnes Group | Ametek vs. Babcock Wilcox Enterprises | Ametek vs. Crane Company | Ametek vs. Hillenbrand |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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