Correlation Between Allegheny Technologies and Blue Capital
Can any of the company-specific risk be diversified away by investing in both Allegheny Technologies and Blue Capital 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 Blue Capital 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 Blue Capital Reinsurance, you can compare the effects of market volatilities on Allegheny Technologies and Blue Capital 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 Blue Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegheny Technologies and Blue Capital.
Diversification Opportunities for Allegheny Technologies and Blue Capital
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Allegheny and Blue is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and Blue Capital Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Capital Reinsurance 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 Blue Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Capital Reinsurance has no effect on the direction of Allegheny Technologies i.e., Allegheny Technologies and Blue Capital go up and down completely randomly.
Pair Corralation between Allegheny Technologies and Blue Capital
Considering the 90-day investment horizon Allegheny Technologies Incorporated is expected to generate 0.14 times more return on investment than Blue Capital. However, Allegheny Technologies Incorporated is 7.25 times less risky than Blue Capital. It trades about 0.07 of its potential returns per unit of risk. Blue Capital Reinsurance is currently generating about -0.04 per unit of risk. If you would invest 3,007 in Allegheny Technologies Incorporated on September 3, 2024 and sell it today you would earn a total of 3,010 from holding Allegheny Technologies Incorporated or generate 100.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 7.88% |
| Values | Daily Returns |
Allegheny Technologies Incorpo vs. Blue Capital Reinsurance
Performance |
| Timeline |
| Allegheny Technologies |
| Blue Capital Reinsurance |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Allegheny Technologies and Blue Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegheny Technologies and Blue Capital
The main advantage of trading using opposite Allegheny Technologies and Blue Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegheny Technologies position performs unexpectedly, Blue Capital 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 Blue Capital will offset losses from the drop in Blue Capital's long position.| Allegheny Technologies vs. Worthington Industries | Allegheny Technologies vs. ESAB Corp | Allegheny Technologies vs. Insteel Industries | Allegheny Technologies vs. Northwest Pipe |
| Blue Capital vs. Insteel Industries | Blue Capital vs. Allegheny Technologies Incorporated | Blue Capital vs. CECO Environmental Corp | Blue Capital vs. Tianjin Capital Environmental |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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