Correlation Between Ampco Pittsburgh and Copart

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

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

Diversification Opportunities for Ampco Pittsburgh and Copart

-0.39

Correlation Coefficient

Ampco Pittsburgh  Copart

Very good diversification

The 3 months correlation between Ampco and Copart is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ampco Pittsburgh and Copart Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copart Inc and Ampco Pittsburgh 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 Ampco Pittsburgh are associated (or correlated) with Copart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copart Inc has no effect on the direction of Ampco Pittsburgh i.e., Ampco Pittsburgh and Copart go up and down completely randomly.

Pair Corralation between Ampco Pittsburgh and Copart

Allowing for the 90-day total investment horizon Ampco Pittsburgh is expected to under-perform the Copart. In addition to that, Ampco Pittsburgh is 3.96 times more volatile than Copart Inc. It trades about -0.09 of its total potential returns per unit of risk. Copart Inc is currently generating about 0.03 per unit of volatility. If you would invest  5,462  in Copart Inc on February 5, 2024 and sell it today you would earn a total of  58.00  from holding Copart Inc or generate 1.06% return on investment over 90 days.

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

Ampco Pittsburgh  vs.  Copart Inc

Ampco Pittsburgh

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ampco Pittsburgh has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in June 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Copart Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Copart Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Copart may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Ampco Pittsburgh and Copart

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

The idea behind Ampco Pittsburgh and Copart Inc 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.