Correlation Between Allegheny Technologies and PVH Corp
Can any of the company-specific risk be diversified away by investing in both Allegheny Technologies and PVH Corp 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 PVH Corp 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 PVH Corp, you can compare the effects of market volatilities on Allegheny Technologies and PVH Corp 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 PVH Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegheny Technologies and PVH Corp.
Diversification Opportunities for Allegheny Technologies and PVH Corp
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Allegheny and PVH is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and PVH Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PVH Corp 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 PVH Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PVH Corp has no effect on the direction of Allegheny Technologies i.e., Allegheny Technologies and PVH Corp go up and down completely randomly.
Pair Corralation between Allegheny Technologies and PVH Corp
Considering the 90-day investment horizon Allegheny Technologies Incorporated is expected to generate 0.93 times more return on investment than PVH Corp. However, Allegheny Technologies Incorporated is 1.08 times less risky than PVH Corp. It trades about 0.07 of its potential returns per unit of risk. PVH Corp is currently generating about 0.04 per unit of risk. If you would invest 3,007 in Allegheny Technologies Incorporated on September 3, 2024 and sell it today you would earn a total of 3,010 from holding Allegheny Technologies Incorporated or generate 100.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allegheny Technologies Incorpo vs. PVH Corp
Performance |
| Timeline |
| Allegheny Technologies |
| PVH Corp |
Allegheny Technologies and PVH Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegheny Technologies and PVH Corp
The main advantage of trading using opposite Allegheny Technologies and PVH Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegheny Technologies position performs unexpectedly, PVH Corp 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 PVH Corp will offset losses from the drop in PVH Corp's long position.| Allegheny Technologies vs. Worthington Industries | Allegheny Technologies vs. ESAB Corp | Allegheny Technologies vs. Insteel Industries | Allegheny Technologies 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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