Correlation Between Allied Machinery and Aluminum Corp
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By analyzing existing cross correlation between Allied Machinery Co and Aluminum Corp of, you can compare the effects of market volatilities on Allied Machinery and Aluminum Corp 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 Allied Machinery with a short position of Aluminum Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Machinery and Aluminum Corp.
Diversification Opportunities for Allied Machinery and Aluminum Corp
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Allied and Aluminum is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Allied Machinery Co and Aluminum Corp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminum Corp and Allied Machinery 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 Allied Machinery Co are associated (or correlated) with Aluminum Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminum Corp has no effect on the direction of Allied Machinery i.e., Allied Machinery and Aluminum Corp go up and down completely randomly.
Pair Corralation between Allied Machinery and Aluminum Corp
Assuming the 90 days trading horizon Allied Machinery Co is expected to generate 1.29 times more return on investment than Aluminum Corp. However, Allied Machinery is 1.29 times more volatile than Aluminum Corp of. It trades about 0.15 of its potential returns per unit of risk. Aluminum Corp of is currently generating about -0.02 per unit of risk. If you would invest 1,514 in Allied Machinery Co on September 1, 2024 and sell it today you would earn a total of 119.00 from holding Allied Machinery Co or generate 7.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allied Machinery Co vs. Aluminum Corp of
Performance |
| Timeline |
| Allied Machinery |
| Aluminum Corp |
Allied Machinery and Aluminum Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Machinery and Aluminum Corp
The main advantage of trading using opposite Allied Machinery and Aluminum Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Machinery position performs unexpectedly, Aluminum Corp 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 Aluminum Corp will offset losses from the drop in Aluminum Corp's long position.| Allied Machinery vs. New China Life | Allied Machinery vs. Ming Yang Smart | Allied Machinery vs. 159681 | Allied Machinery vs. 159005 |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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