Correlation Between Allegheny Technologies and ICC Holdings
Can any of the company-specific risk be diversified away by investing in both Allegheny Technologies and ICC Holdings 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 ICC Holdings 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 ICC Holdings, you can compare the effects of market volatilities on Allegheny Technologies and ICC Holdings 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 ICC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegheny Technologies and ICC Holdings.
Diversification Opportunities for Allegheny Technologies and ICC Holdings
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Allegheny and ICC is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and ICC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICC Holdings 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 ICC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICC Holdings has no effect on the direction of Allegheny Technologies i.e., Allegheny Technologies and ICC Holdings go up and down completely randomly.
Pair Corralation between Allegheny Technologies and ICC Holdings
Considering the 90-day investment horizon Allegheny Technologies Incorporated is expected to under-perform the ICC Holdings. In addition to that, Allegheny Technologies is 5.09 times more volatile than ICC Holdings. It trades about -0.09 of its total potential returns per unit of risk. ICC Holdings is currently generating about 0.03 per unit of volatility. If you would invest 2,301 in ICC Holdings on August 24, 2024 and sell it today you would earn a total of 6.00 from holding ICC Holdings or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 78.26% |
| Values | Daily Returns |
Allegheny Technologies Incorpo vs. ICC Holdings
Performance |
| Timeline |
| Allegheny Technologies |
| ICC Holdings |
Allegheny Technologies and ICC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegheny Technologies and ICC Holdings
The main advantage of trading using opposite Allegheny Technologies and ICC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegheny Technologies position performs unexpectedly, ICC Holdings 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 ICC Holdings will offset losses from the drop in ICC Holdings' long position.| Allegheny Technologies vs. Worthington Industries | Allegheny Technologies vs. Haynes International | Allegheny Technologies vs. ESAB Corp | Allegheny Technologies vs. Insteel Industries |
| ICC Holdings vs. Employers Holdings | ICC Holdings vs. AMERISAFE | ICC Holdings vs. NMI Holdings | ICC Holdings vs. Investors Title |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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