Correlation Between Allegheny Technologies and Ampco Pittsburgh
Can any of the company-specific risk be diversified away by investing in both Allegheny Technologies and Ampco Pittsburgh 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 Ampco Pittsburgh 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 Ampco Pittsburgh, you can compare the effects of market volatilities on Allegheny Technologies and Ampco Pittsburgh 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 Ampco Pittsburgh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegheny Technologies and Ampco Pittsburgh.
Diversification Opportunities for Allegheny Technologies and Ampco Pittsburgh
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Allegheny and Ampco is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and Ampco Pittsburgh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampco Pittsburgh 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 Ampco Pittsburgh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampco Pittsburgh has no effect on the direction of Allegheny Technologies i.e., Allegheny Technologies and Ampco Pittsburgh go up and down completely randomly.
Pair Corralation between Allegheny Technologies and Ampco Pittsburgh
Considering the 90-day investment horizon Allegheny Technologies Incorporated is expected to generate 0.79 times more return on investment than Ampco Pittsburgh. However, Allegheny Technologies Incorporated is 1.26 times less risky than Ampco Pittsburgh. It trades about 0.11 of its potential returns per unit of risk. Ampco Pittsburgh is currently generating about -0.2 per unit of risk. If you would invest 5,718 in Allegheny Technologies Incorporated on November 18, 2024 and sell it today you would earn a total of 386.00 from holding Allegheny Technologies Incorporated or generate 6.75% 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. Ampco Pittsburgh
Performance |
| Timeline |
| Allegheny Technologies |
| Ampco Pittsburgh |
Allegheny Technologies and Ampco Pittsburgh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegheny Technologies and Ampco Pittsburgh
The main advantage of trading using opposite Allegheny Technologies and Ampco Pittsburgh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegheny Technologies position performs unexpectedly, Ampco Pittsburgh 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 Ampco Pittsburgh will offset losses from the drop in Ampco Pittsburgh's long position.| Allegheny Technologies vs. Worthington Industries | Allegheny Technologies vs. ESAB Corp | Allegheny Technologies vs. Insteel Industries | Allegheny Technologies vs. Northwest Pipe |
| Ampco Pittsburgh vs. Northwest Pipe | Ampco Pittsburgh vs. Insteel Industries | Ampco Pittsburgh vs. Carpenter Technology | Ampco Pittsburgh vs. ESAB Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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