Correlation Between Allegheny Technologies and Grindrod
Can any of the company-specific risk be diversified away by investing in both Allegheny Technologies and Grindrod 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 Grindrod 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 Grindrod Ltd ADR, you can compare the effects of market volatilities on Allegheny Technologies and Grindrod 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 Grindrod. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegheny Technologies and Grindrod.
Diversification Opportunities for Allegheny Technologies and Grindrod
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Allegheny and Grindrod is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and Grindrod Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grindrod ADR 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 Grindrod. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grindrod ADR has no effect on the direction of Allegheny Technologies i.e., Allegheny Technologies and Grindrod go up and down completely randomly.
Pair Corralation between Allegheny Technologies and Grindrod
Considering the 90-day investment horizon Allegheny Technologies Incorporated is expected to generate 27.9 times more return on investment than Grindrod. However, Allegheny Technologies is 27.9 times more volatile than Grindrod Ltd ADR. It trades about 0.06 of its potential returns per unit of risk. Grindrod Ltd ADR is currently generating about 0.09 per unit of risk. If you would invest 4,267 in Allegheny Technologies Incorporated on September 12, 2024 and sell it today you would earn a total of 1,442 from holding Allegheny Technologies Incorporated or generate 33.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Allegheny Technologies Incorpo vs. Grindrod Ltd ADR
Performance |
| Timeline |
| Allegheny Technologies |
| Grindrod ADR |
Allegheny Technologies and Grindrod Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegheny Technologies and Grindrod
The main advantage of trading using opposite Allegheny Technologies and Grindrod positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegheny Technologies position performs unexpectedly, Grindrod 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 Grindrod will offset losses from the drop in Grindrod's long position.| Allegheny Technologies vs. Worthington Industries | Allegheny Technologies vs. ESAB Corp | Allegheny Technologies vs. Insteel Industries | Allegheny Technologies vs. Northwest Pipe |
| Grindrod vs. Ardelyx | Grindrod vs. Allegheny Technologies Incorporated | Grindrod vs. Osaka Steel Co, | Grindrod vs. Mind Medicine |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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