Correlation Between TKOLF and Alamo

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

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

Diversification Opportunities for TKOLF and Alamo

-0.82

Correlation Coefficient

TKOLF  Alamo

Pay attention - limited upside

The 3 months correlation between TKOLF and Alamo is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding TKOLF and Alamo Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamo Group and TKOLF 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 TKOLF are associated (or correlated) with Alamo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alamo Group has no effect on the direction of TKOLF i.e., TKOLF and Alamo go up and down completely randomly.

Pair Corralation between TKOLF and Alamo

Assuming the 90 days horizon TKOLF is expected to generate 0.25 times more return on investment than Alamo. However, TKOLF is 4.07 times less risky than Alamo. It trades about 0.12 of its potential returns per unit of risk. Alamo Group is currently generating about -0.14 per unit of risk. If you would invest  1,166  in TKOLF on July 29, 2025 and sell it today you would earn a total of  37.00  from holding TKOLF or generate 3.17% return on investment over 90 days.

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

TKOLF  vs.  Alamo Group

TKOLF

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in TKOLF are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, TKOLF is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Alamo Group

Risk-Adjusted Performance

Weakest

Over the last 90 days Alamo Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in November 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with TKOLF and Alamo

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

The idea behind TKOLF and Alamo Group 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.