Correlation Between Allient and ChampionX
Can any of the company-specific risk be diversified away by investing in both Allient and ChampionX 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 ChampionX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allient and ChampionX, you can compare the effects of market volatilities on Allient and ChampionX 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 ChampionX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allient and ChampionX.
Diversification Opportunities for Allient and ChampionX
Good diversification
The 3 months correlation between Allient and ChampionX is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Allient and ChampionX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChampionX 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 ChampionX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChampionX has no effect on the direction of Allient i.e., Allient and ChampionX go up and down completely randomly.
Pair Corralation between Allient and ChampionX
Given the investment horizon of 90 days Allient is expected to generate 1.37 times more return on investment than ChampionX. However, Allient is 1.37 times more volatile than ChampionX. It trades about -0.14 of its potential returns per unit of risk. ChampionX is currently generating about -0.48 per unit of risk. If you would invest 2,529 in Allient on September 24, 2024 and sell it today you would lose (168.00) from holding Allient or give up 6.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allient vs. ChampionX
Performance |
| Timeline |
| Allient |
| ChampionX |
Allient and ChampionX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allient and ChampionX
The main advantage of trading using opposite Allient and ChampionX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allient position performs unexpectedly, ChampionX 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 ChampionX will offset losses from the drop in ChampionX's long position.| Allient vs. Hf Foods Group | Allient vs. NH Foods Ltd | Allient vs. Integral Ad Science | Allient vs. Zijin Mining Group |
| ChampionX vs. Oceaneering International | ChampionX vs. Valaris | ChampionX vs. Geospace Technologies | ChampionX vs. Liberty Oilfield Services |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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