Correlation Between Alta Equipment and Visteon Corp
Can any of the company-specific risk be diversified away by investing in both Alta Equipment and Visteon Corp 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 Alta Equipment and Visteon Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alta Equipment Group and Visteon Corp, you can compare the effects of market volatilities on Alta Equipment and Visteon Corp 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 Alta Equipment with a short position of Visteon Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alta Equipment and Visteon Corp.
Diversification Opportunities for Alta Equipment and Visteon Corp
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alta and Visteon is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Alta Equipment Group and Visteon Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visteon Corp and Alta Equipment 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 Alta Equipment Group are associated (or correlated) with Visteon Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visteon Corp has no effect on the direction of Alta Equipment i.e., Alta Equipment and Visteon Corp go up and down completely randomly.
Pair Corralation between Alta Equipment and Visteon Corp
Given the investment horizon of 90 days Alta Equipment Group is expected to generate 2.14 times more return on investment than Visteon Corp. However, Alta Equipment is 2.14 times more volatile than Visteon Corp. It trades about 0.28 of its potential returns per unit of risk. Visteon Corp is currently generating about 0.3 per unit of risk. If you would invest 421.00 in Alta Equipment Group on April 30, 2025 and sell it today you would earn a total of 441.00 from holding Alta Equipment Group or generate 104.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alta Equipment Group vs. Visteon Corp
Performance |
| Timeline |
| Alta Equipment Group |
| Visteon Corp |
Alta Equipment and Visteon Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alta Equipment and Visteon Corp
The main advantage of trading using opposite Alta Equipment and Visteon Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alta Equipment position performs unexpectedly, Visteon Corp 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 Visteon Corp will offset losses from the drop in Visteon Corp's long position.| Alta Equipment vs. Custom Truck One | Alta Equipment vs. PROG Holdings | Alta Equipment vs. McGrath RentCorp | Alta Equipment vs. Enerpac Tool Group |
| Visteon Corp vs. Autoliv | Visteon Corp vs. American Axle Manufacturing | Visteon Corp vs. BorgWarner | Visteon Corp vs. Dana Inc |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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