Correlation Between Allegheny Technologies and Natures Miracle
Can any of the company-specific risk be diversified away by investing in both Allegheny Technologies and Natures Miracle 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 Natures Miracle 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 Natures Miracle Holding, you can compare the effects of market volatilities on Allegheny Technologies and Natures Miracle 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 Natures Miracle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegheny Technologies and Natures Miracle.
Diversification Opportunities for Allegheny Technologies and Natures Miracle
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Allegheny and Natures is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and Natures Miracle Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natures Miracle Holding 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 Natures Miracle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natures Miracle Holding has no effect on the direction of Allegheny Technologies i.e., Allegheny Technologies and Natures Miracle go up and down completely randomly.
Pair Corralation between Allegheny Technologies and Natures Miracle
Considering the 90-day investment horizon Allegheny Technologies Incorporated is expected to under-perform the Natures Miracle. But the stock apears to be less risky and, when comparing its historical volatility, Allegheny Technologies Incorporated is 20.7 times less risky than Natures Miracle. The stock trades about -0.05 of its potential returns per unit of risk. The Natures Miracle Holding is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1.69 in Natures Miracle Holding on September 12, 2024 and sell it today you would lose (0.59) from holding Natures Miracle Holding or give up 34.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 54.69% |
| Values | Daily Returns |
Allegheny Technologies Incorpo vs. Natures Miracle Holding
Performance |
| Timeline |
| Allegheny Technologies |
| Natures Miracle Holding |
Allegheny Technologies and Natures Miracle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegheny Technologies and Natures Miracle
The main advantage of trading using opposite Allegheny Technologies and Natures Miracle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegheny Technologies position performs unexpectedly, Natures Miracle 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 Natures Miracle will offset losses from the drop in Natures Miracle's long position.| Allegheny Technologies vs. Worthington Industries | Allegheny Technologies vs. ESAB Corp | Allegheny Technologies vs. Insteel Industries | Allegheny Technologies vs. Northwest Pipe |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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