Correlation Between Aluminum Corp and Allegheny Technologies
Can any of the company-specific risk be diversified away by investing in both Aluminum Corp and Allegheny Technologies 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 Aluminum Corp and Allegheny Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluminum Corp and Allegheny Technologies Incorporated, you can compare the effects of market volatilities on Aluminum Corp and Allegheny Technologies 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 Aluminum Corp with a short position of Allegheny Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminum Corp and Allegheny Technologies.
Diversification Opportunities for Aluminum Corp and Allegheny Technologies
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aluminum and Allegheny is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum Corp and Allegheny Technologies Incorpo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegheny Technologies and Aluminum Corp 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 Aluminum Corp are associated (or correlated) with Allegheny Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegheny Technologies has no effect on the direction of Aluminum Corp i.e., Aluminum Corp and Allegheny Technologies go up and down completely randomly.
Pair Corralation between Aluminum Corp and Allegheny Technologies
If you would invest (100.00) in Aluminum Corp on January 24, 2024 and sell it today you would earn a total of 100.00 from holding Aluminum Corp or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Aluminum Corp vs. Allegheny Technologies Incorpo
Performance |
| Timeline |
| Aluminum Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Allegheny Technologies |
Aluminum Corp and Allegheny Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminum Corp and Allegheny Technologies
The main advantage of trading using opposite Aluminum Corp and Allegheny Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminum Corp position performs unexpectedly, Allegheny Technologies 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 Allegheny Technologies will offset losses from the drop in Allegheny Technologies' long position.| Aluminum Corp vs. Nabors Industries | Aluminum Corp vs. United Microelectronics | Aluminum Corp vs. KLA Tencor | Aluminum Corp vs. Microchip Technology |
| Allegheny Technologies vs. Northwest Pipe | Allegheny Technologies vs. Insteel Industries | Allegheny Technologies vs. ESAB Corp | Allegheny Technologies vs. Gulf Island Fabrication |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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