Correlation Between Atkore International and Ameresco

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

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

Diversification Opportunities for Atkore International and Ameresco

-0.38

Correlation Coefficient

Atkore International  Ameresco

Very good diversification

The 3 months correlation between Atkore and Ameresco is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Atkore International Group and Ameresco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameresco and Atkore International 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 Atkore International Group are associated (or correlated) with Ameresco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameresco has no effect on the direction of Atkore International i.e., Atkore International and Ameresco go up and down completely randomly.

Pair Corralation between Atkore International and Ameresco

Given the investment horizon of 90 days Atkore International Group is expected to under-perform the Ameresco. But the stock apears to be less risky and, when comparing its historical volatility, Atkore International Group is 1.71 times less risky than Ameresco. The stock trades about -0.21 of its potential returns per unit of risk. The Ameresco is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  2,089  in Ameresco on February 23, 2024 and sell it today you would earn a total of  1,072  from holding Ameresco or generate 51.32% return on investment over 90 days.

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

Atkore International Group  vs.  Ameresco

Atkore International

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Atkore International Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward-looking signals, Atkore International is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Ameresco

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ameresco are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, Ameresco exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atkore International and Ameresco

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

The idea behind Atkore International Group and Ameresco 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.