Correlation Between Allegheny Technologies and Mueller Industries
Can any of the company-specific risk be diversified away by investing in both Allegheny Technologies and Mueller Industries 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 Mueller Industries 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 Mueller Industries, you can compare the effects of market volatilities on Allegheny Technologies and Mueller Industries 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 Mueller Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegheny Technologies and Mueller Industries.
Diversification Opportunities for Allegheny Technologies and Mueller Industries
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Allegheny and Mueller is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and Mueller Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mueller Industries 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 Mueller Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mueller Industries has no effect on the direction of Allegheny Technologies i.e., Allegheny Technologies and Mueller Industries go up and down completely randomly.
Pair Corralation between Allegheny Technologies and Mueller Industries
Considering the 90-day investment horizon Allegheny Technologies is expected to generate 1.27 times less return on investment than Mueller Industries. In addition to that, Allegheny Technologies is 1.11 times more volatile than Mueller Industries. It trades about 0.07 of its total potential returns per unit of risk. Mueller Industries is currently generating about 0.1 per unit of volatility. If you would invest 3,222 in Mueller Industries on August 28, 2024 and sell it today you would earn a total of 4,993 from holding Mueller Industries or generate 154.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allegheny Technologies Incorpo vs. Mueller Industries
Performance |
| Timeline |
| Allegheny Technologies |
| Mueller Industries |
Allegheny Technologies and Mueller Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegheny Technologies and Mueller Industries
The main advantage of trading using opposite Allegheny Technologies and Mueller Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegheny Technologies position performs unexpectedly, Mueller Industries 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 Mueller Industries will offset losses from the drop in Mueller Industries' long position.| Allegheny Technologies vs. Worthington Industries | Allegheny Technologies vs. Haynes International | Allegheny Technologies vs. ESAB Corp | Allegheny Technologies vs. Insteel Industries |
| Mueller Industries vs. Insteel Industries | Mueller Industries vs. Carpenter Technology | Mueller Industries vs. Haynes International | Mueller Industries vs. Northwest Pipe |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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