Correlation Between Allis Electric and Anderson Industrial
Can any of the company-specific risk be diversified away by investing in both Allis Electric and Anderson Industrial 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 Allis Electric and Anderson Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allis Electric Co and Anderson Industrial Corp, you can compare the effects of market volatilities on Allis Electric and Anderson Industrial 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 Allis Electric with a short position of Anderson Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allis Electric and Anderson Industrial.
Diversification Opportunities for Allis Electric and Anderson Industrial
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Allis and Anderson is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Allis Electric Co and Anderson Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anderson Industrial Corp and Allis Electric 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 Allis Electric Co are associated (or correlated) with Anderson Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anderson Industrial Corp has no effect on the direction of Allis Electric i.e., Allis Electric and Anderson Industrial go up and down completely randomly.
Pair Corralation between Allis Electric and Anderson Industrial
Assuming the 90 days trading horizon Allis Electric Co is expected to generate 0.91 times more return on investment than Anderson Industrial. However, Allis Electric Co is 1.1 times less risky than Anderson Industrial. It trades about -0.02 of its potential returns per unit of risk. Anderson Industrial Corp is currently generating about -0.25 per unit of risk. If you would invest 11,200 in Allis Electric Co on September 4, 2024 and sell it today you would lose (200.00) from holding Allis Electric Co or give up 1.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allis Electric Co vs. Anderson Industrial Corp
Performance |
| Timeline |
| Allis Electric |
| Anderson Industrial Corp |
Allis Electric and Anderson Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allis Electric and Anderson Industrial
The main advantage of trading using opposite Allis Electric and Anderson Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allis Electric position performs unexpectedly, Anderson Industrial 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 Anderson Industrial will offset losses from the drop in Anderson Industrial's long position.| Allis Electric vs. Universal Microelectronics Co | Allis Electric vs. AVerMedia Technologies | Allis Electric vs. Symtek Automation Asia | Allis Electric vs. WiseChip Semiconductor |
| Anderson Industrial vs. Universal Microelectronics Co | Anderson Industrial vs. AVerMedia Technologies | Anderson Industrial vs. Symtek Automation Asia | Anderson Industrial vs. WiseChip Semiconductor |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |