Correlation Between Allegheny Technologies and FiscalNote Holdings
Can any of the company-specific risk be diversified away by investing in both Allegheny Technologies and FiscalNote 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 FiscalNote 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 FiscalNote Holdings, you can compare the effects of market volatilities on Allegheny Technologies and FiscalNote 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 FiscalNote Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegheny Technologies and FiscalNote Holdings.
Diversification Opportunities for Allegheny Technologies and FiscalNote Holdings
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Allegheny and FiscalNote is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and FiscalNote Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FiscalNote 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 FiscalNote Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FiscalNote Holdings has no effect on the direction of Allegheny Technologies i.e., Allegheny Technologies and FiscalNote Holdings go up and down completely randomly.
Pair Corralation between Allegheny Technologies and FiscalNote Holdings
Considering the 90-day investment horizon Allegheny Technologies Incorporated is expected to generate 0.45 times more return on investment than FiscalNote Holdings. However, Allegheny Technologies Incorporated is 2.21 times less risky than FiscalNote Holdings. It trades about 0.08 of its potential returns per unit of risk. FiscalNote Holdings is currently generating about 0.01 per unit of risk. If you would invest 4,091 in Allegheny Technologies Incorporated on September 4, 2024 and sell it today you would earn a total of 1,883 from holding Allegheny Technologies Incorporated or generate 46.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allegheny Technologies Incorpo vs. FiscalNote Holdings
Performance |
| Timeline |
| Allegheny Technologies |
| FiscalNote Holdings |
Allegheny Technologies and FiscalNote Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegheny Technologies and FiscalNote Holdings
The main advantage of trading using opposite Allegheny Technologies and FiscalNote Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegheny Technologies position performs unexpectedly, FiscalNote 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 FiscalNote Holdings will offset losses from the drop in FiscalNote Holdings' long position.| Allegheny Technologies vs. Worthington Industries | Allegheny Technologies vs. ESAB Corp | Allegheny Technologies vs. Insteel Industries | Allegheny Technologies vs. Northwest Pipe |
| FiscalNote Holdings vs. Innodata | FiscalNote Holdings vs. International Business Machines | FiscalNote Holdings vs. Aurora Innovation | FiscalNote Holdings vs. BigBearai Holdings |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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