Correlation Between AGCO and Columbus McKinnon

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

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

Diversification Opportunities for AGCO and Columbus McKinnon

0.08

Correlation Coefficient

AGCO  Columbus McKinnon

Significant diversification

The 3 months correlation between AGCO and Columbus is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding AGCO Corp. and Columbus McKinnon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbus McKinnon and AGCO 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 AGCO Corporation are associated (or correlated) with Columbus McKinnon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbus McKinnon has no effect on the direction of AGCO i.e., AGCO and Columbus McKinnon go up and down completely randomly.

Pair Corralation between AGCO and Columbus McKinnon

Given the investment horizon of 90 days AGCO Corporation is expected to generate 0.57 times more return on investment than Columbus McKinnon. However, AGCO Corporation is 1.76 times less risky than Columbus McKinnon. It trades about 0.14 of its potential returns per unit of risk. Columbus McKinnon is currently generating about -0.01 per unit of risk. If you would invest  9,418  in AGCO Corporation on May 7, 2025 and sell it today you would earn a total of  1,945  from holding AGCO Corporation or generate 20.65% return on investment over 90 days.

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

AGCO Corp.  vs.  Columbus McKinnon

AGCO

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AGCO Corporation are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, AGCO displayed solid returns over the last few months and may actually be approaching a breakup point.

Columbus McKinnon

Risk-Adjusted Performance

Weakest

Over the last 90 days Columbus McKinnon has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Columbus McKinnon is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with AGCO and Columbus McKinnon

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

The idea behind AGCO Corporation and Columbus McKinnon 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.