Correlation Between Allegheny Technologies and CompoSecure
Can any of the company-specific risk be diversified away by investing in both Allegheny Technologies and CompoSecure 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 CompoSecure 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 CompoSecure, you can compare the effects of market volatilities on Allegheny Technologies and CompoSecure 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 CompoSecure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegheny Technologies and CompoSecure.
Diversification Opportunities for Allegheny Technologies and CompoSecure
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Allegheny and CompoSecure is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and CompoSecure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompoSecure 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 CompoSecure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CompoSecure has no effect on the direction of Allegheny Technologies i.e., Allegheny Technologies and CompoSecure go up and down completely randomly.
Pair Corralation between Allegheny Technologies and CompoSecure
Considering the 90-day investment horizon Allegheny Technologies Incorporated is expected to under-perform the CompoSecure. In addition to that, Allegheny Technologies is 1.06 times more volatile than CompoSecure. It trades about -0.09 of its total potential returns per unit of risk. CompoSecure is currently generating about 0.04 per unit of volatility. If you would invest 1,527 in CompoSecure on August 24, 2024 and sell it today you would earn a total of 25.00 from holding CompoSecure or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allegheny Technologies Incorpo vs. CompoSecure
Performance |
| Timeline |
| Allegheny Technologies |
| CompoSecure |
Allegheny Technologies and CompoSecure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegheny Technologies and CompoSecure
The main advantage of trading using opposite Allegheny Technologies and CompoSecure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegheny Technologies position performs unexpectedly, CompoSecure 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 CompoSecure will offset losses from the drop in CompoSecure's long position.| Allegheny Technologies vs. Worthington Industries | Allegheny Technologies vs. Haynes International | Allegheny Technologies vs. ESAB Corp | Allegheny Technologies vs. Insteel Industries |
| CompoSecure vs. Northwest Pipe | CompoSecure vs. Insteel Industries | CompoSecure vs. Carpenter Technology | CompoSecure 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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