Correlation Between Powell Industries and Arcosa
Can any of the company-specific risk be diversified away by investing in both Powell Industries and Arcosa 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 Powell Industries and Arcosa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Powell Industries and Arcosa Inc, you can compare the effects of market volatilities on Powell Industries and Arcosa 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 Powell Industries with a short position of Arcosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Powell Industries and Arcosa.
Diversification Opportunities for Powell Industries and Arcosa
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Powell and Arcosa is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Powell Industries and Arcosa Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcosa Inc and Powell 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 Powell Industries are associated (or correlated) with Arcosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcosa Inc has no effect on the direction of Powell Industries i.e., Powell Industries and Arcosa go up and down completely randomly.
Pair Corralation between Powell Industries and Arcosa
Given the investment horizon of 90 days Powell Industries is expected to generate 1.9 times more return on investment than Arcosa. However, Powell Industries is 1.9 times more volatile than Arcosa Inc. It trades about 0.12 of its potential returns per unit of risk. Arcosa Inc is currently generating about 0.09 per unit of risk. If you would invest 26,802 in Powell Industries on September 5, 2025 and sell it today you would earn a total of 6,891 from holding Powell Industries or generate 25.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Powell Industries vs. Arcosa Inc
Performance |
| Timeline |
| Powell Industries |
| Arcosa Inc |
Powell Industries and Arcosa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Powell Industries and Arcosa
The main advantage of trading using opposite Powell Industries and Arcosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Powell Industries position performs unexpectedly, Arcosa 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 Arcosa will offset losses from the drop in Arcosa's long position.| Powell Industries vs. Richardson Electronics | Powell Industries vs. Kid Castle Educational | Powell Industries vs. The Dewey Electronics | Powell Industries vs. China Education Resources |
| Arcosa vs. Smith Douglas Homes | Arcosa vs. Nobility Homes | Arcosa vs. Purple Beverage | Arcosa vs. Koios Beverage Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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