Correlation Between Astec Industries and Limbach Holdings
Can any of the company-specific risk be diversified away by investing in both Astec Industries and Limbach Holdings 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 Astec Industries and Limbach Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astec Industries and Limbach Holdings, you can compare the effects of market volatilities on Astec Industries and Limbach Holdings 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 Astec Industries with a short position of Limbach Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astec Industries and Limbach Holdings.
Diversification Opportunities for Astec Industries and Limbach Holdings
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Astec and Limbach is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Astec Industries and Limbach Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Limbach Holdings and Astec Industries 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 Astec Industries are associated (or correlated) with Limbach Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Limbach Holdings has no effect on the direction of Astec Industries i.e., Astec Industries and Limbach Holdings go up and down completely randomly.
Pair Corralation between Astec Industries and Limbach Holdings
Given the investment horizon of 90 days Astec Industries is expected to generate 0.6 times more return on investment than Limbach Holdings. However, Astec Industries is 1.67 times less risky than Limbach Holdings. It trades about -0.01 of its potential returns per unit of risk. Limbach Holdings is currently generating about -0.13 per unit of risk. If you would invest 4,600 in Astec Industries on September 10, 2025 and sell it today you would lose (141.00) from holding Astec Industries or give up 3.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astec Industries vs. Limbach Holdings
Performance |
| Timeline |
| Astec Industries |
| Limbach Holdings |
Astec Industries and Limbach Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astec Industries and Limbach Holdings
The main advantage of trading using opposite Astec Industries and Limbach Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astec Industries position performs unexpectedly, Limbach Holdings 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 Limbach Holdings will offset losses from the drop in Limbach Holdings' long position.| Astec Industries vs. Lindsay | Astec Industries vs. Ballard Power Systems | Astec Industries vs. Global Industrial Co | Astec Industries vs. Limbach Holdings |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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