Correlation Between Allied Motion and Data IO
Can any of the company-specific risk be diversified away by investing in both Allied Motion and Data IO 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 Allied Motion and Data IO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allied Motion Technologies and Data IO, you can compare the effects of market volatilities on Allied Motion and Data IO 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 Motion with a short position of Data IO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Motion and Data IO.
Diversification Opportunities for Allied Motion and Data IO
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Allied and Data is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Allied Motion Technologies and Data IO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data IO and Allied Motion 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 Motion Technologies are associated (or correlated) with Data IO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data IO has no effect on the direction of Allied Motion i.e., Allied Motion and Data IO go up and down completely randomly.
Pair Corralation between Allied Motion and Data IO
If you would invest 281.00 in Data IO on October 26, 2024 and sell it today you would earn a total of 9.00 from holding Data IO or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.56% |
| Values | Daily Returns |
Allied Motion Technologies vs. Data IO
Performance |
| Timeline |
| Allied Motion Techno |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Data IO |
Allied Motion and Data IO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Motion and Data IO
The main advantage of trading using opposite Allied Motion and Data IO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Motion position performs unexpectedly, Data IO 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 Data IO will offset losses from the drop in Data IO's long position.| Allied Motion vs. Plexus Corp | Allied Motion vs. Sanmina | Allied Motion vs. Bel Fuse A | Allied Motion vs. Methode Electronics |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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