Correlation Between Allegheny Technologies and FIRST SAVINGS
Can any of the company-specific risk be diversified away by investing in both Allegheny Technologies and FIRST SAVINGS 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 Allegheny Technologies and FIRST SAVINGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allegheny Technologies Incorporated and FIRST SAVINGS FINL, you can compare the effects of market volatilities on Allegheny Technologies and FIRST SAVINGS 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 Allegheny Technologies with a short position of FIRST SAVINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegheny Technologies and FIRST SAVINGS.
Diversification Opportunities for Allegheny Technologies and FIRST SAVINGS
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Allegheny and FIRST is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and FIRST SAVINGS FINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST SAVINGS FINL and Allegheny Technologies 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 Allegheny Technologies Incorporated are associated (or correlated) with FIRST SAVINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST SAVINGS FINL has no effect on the direction of Allegheny Technologies i.e., Allegheny Technologies and FIRST SAVINGS go up and down completely randomly.
Pair Corralation between Allegheny Technologies and FIRST SAVINGS
Assuming the 90 days trading horizon Allegheny Technologies Incorporated is expected to generate 0.6 times more return on investment than FIRST SAVINGS. However, Allegheny Technologies Incorporated is 1.66 times less risky than FIRST SAVINGS. It trades about 0.2 of its potential returns per unit of risk. FIRST SAVINGS FINL is currently generating about 0.1 per unit of risk. If you would invest 5,290 in Allegheny Technologies Incorporated on October 25, 2024 and sell it today you would earn a total of 264.00 from holding Allegheny Technologies Incorporated or generate 4.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allegheny Technologies Incorpo vs. FIRST SAVINGS FINL
Performance |
| Timeline |
| Allegheny Technologies |
| FIRST SAVINGS FINL |
Allegheny Technologies and FIRST SAVINGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegheny Technologies and FIRST SAVINGS
The main advantage of trading using opposite Allegheny Technologies and FIRST SAVINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegheny Technologies position performs unexpectedly, FIRST SAVINGS 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 FIRST SAVINGS will offset losses from the drop in FIRST SAVINGS's long position.| Allegheny Technologies vs. Apple Inc | Allegheny Technologies vs. Apple Inc | Allegheny Technologies vs. Apple Inc | Allegheny Technologies vs. Apple Inc |
| FIRST SAVINGS vs. Laureate Education | FIRST SAVINGS vs. Amkor Technology | FIRST SAVINGS vs. EEDUCATION ALBERT AB | FIRST SAVINGS vs. Allegheny Technologies Incorporated |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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