Correlation Between Allient and Worthington Steel
Can any of the company-specific risk be diversified away by investing in both Allient and Worthington Steel 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 Worthington Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allient and Worthington Steel, you can compare the effects of market volatilities on Allient and Worthington Steel 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 Worthington Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allient and Worthington Steel.
Diversification Opportunities for Allient and Worthington Steel
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Allient and Worthington is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Allient and Worthington Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worthington Steel 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 Worthington Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worthington Steel has no effect on the direction of Allient i.e., Allient and Worthington Steel go up and down completely randomly.
Pair Corralation between Allient and Worthington Steel
Given the investment horizon of 90 days Allient is expected to generate 1.66 times more return on investment than Worthington Steel. However, Allient is 1.66 times more volatile than Worthington Steel. It trades about 0.22 of its potential returns per unit of risk. Worthington Steel is currently generating about -0.1 per unit of risk. If you would invest 2,325 in Allient on September 13, 2024 and sell it today you would earn a total of 244.00 from holding Allient or generate 10.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allient vs. Worthington Steel
Performance |
| Timeline |
| Allient |
| Worthington Steel |
Allient and Worthington Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allient and Worthington Steel
The main advantage of trading using opposite Allient and Worthington Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allient position performs unexpectedly, Worthington Steel 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 Worthington Steel will offset losses from the drop in Worthington Steel's long position.| Allient vs. Vicor | Allient vs. LSI Industries | Allient vs. Shenzhen Genvict Technologies | Allient vs. Topsec Technologies Group |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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