Correlation Between Allient and Investec
Can any of the company-specific risk be diversified away by investing in both Allient and Investec 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 Investec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allient and Investec Group, you can compare the effects of market volatilities on Allient and Investec 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 Investec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allient and Investec.
Diversification Opportunities for Allient and Investec
Weak diversification
The 3 months correlation between Allient and Investec is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Allient and Investec Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Group 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 Investec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Group has no effect on the direction of Allient i.e., Allient and Investec go up and down completely randomly.
Pair Corralation between Allient and Investec
Given the investment horizon of 90 days Allient is expected to under-perform the Investec. In addition to that, Allient is 3.06 times more volatile than Investec Group. It trades about -0.16 of its total potential returns per unit of risk. Investec Group is currently generating about 0.22 per unit of volatility. If you would invest 1,062 in Investec Group on October 13, 2024 and sell it today you would earn a total of 42.00 from holding Investec Group or generate 3.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allient vs. Investec Group
Performance |
| Timeline |
| Allient |
| Investec Group |
Allient and Investec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allient and Investec
The main advantage of trading using opposite Allient and Investec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allient position performs unexpectedly, Investec 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 Investec will offset losses from the drop in Investec's long position.| Allient vs. Zhihu Inc ADR | Allient vs. NETGEAR | Allient vs. BK Technologies | Allient vs. Integral Ad Science |
| Investec vs. Albertsons Companies | Investec vs. First Watch Restaurant | Investec vs. United Natural Foods | Investec vs. Kellanova |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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