Correlation Between Allient and Analog Devices
Can any of the company-specific risk be diversified away by investing in both Allient and Analog Devices 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 Allient and Analog Devices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allient and Analog Devices, you can compare the effects of market volatilities on Allient and Analog Devices 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 Allient with a short position of Analog Devices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allient and Analog Devices.
Diversification Opportunities for Allient and Analog Devices
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Allient and Analog is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Allient and Analog Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analog Devices and Allient 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 Allient are associated (or correlated) with Analog Devices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Devices has no effect on the direction of Allient i.e., Allient and Analog Devices go up and down completely randomly.
Pair Corralation between Allient and Analog Devices
Given the investment horizon of 90 days Allient is expected to generate 1.52 times more return on investment than Analog Devices. However, Allient is 1.52 times more volatile than Analog Devices. It trades about 0.6 of its potential returns per unit of risk. Analog Devices is currently generating about -0.13 per unit of risk. If you would invest 1,699 in Allient on August 24, 2024 and sell it today you would earn a total of 763.00 from holding Allient or generate 44.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allient vs. Analog Devices
Performance |
| Timeline |
| Allient |
| Analog Devices |
Allient and Analog Devices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allient and Analog Devices
The main advantage of trading using opposite Allient and Analog Devices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allient position performs unexpectedly, Analog Devices 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 Analog Devices will offset losses from the drop in Analog Devices' long position.| Allient vs. Analog Devices | Allient vs. Boyd Gaming | Allient vs. Doubledown Interactive Co | Allient vs. Electronic Arts |
| Analog Devices vs. Eshallgo Class A | Analog Devices vs. Amtech Systems | Analog Devices vs. Gold Fields Ltd | Analog Devices vs. Aegean Airlines SA |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |