Correlation Between Allegheny Technologies and BBB Foods
Can any of the company-specific risk be diversified away by investing in both Allegheny Technologies and BBB Foods 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 BBB Foods 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 BBB Foods, you can compare the effects of market volatilities on Allegheny Technologies and BBB Foods 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 BBB Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegheny Technologies and BBB Foods.
Diversification Opportunities for Allegheny Technologies and BBB Foods
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Allegheny and BBB is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and BBB Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBB Foods 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 BBB Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBB Foods has no effect on the direction of Allegheny Technologies i.e., Allegheny Technologies and BBB Foods go up and down completely randomly.
Pair Corralation between Allegheny Technologies and BBB Foods
Considering the 90-day investment horizon Allegheny Technologies Incorporated is expected to generate 0.67 times more return on investment than BBB Foods. However, Allegheny Technologies Incorporated is 1.49 times less risky than BBB Foods. It trades about 0.22 of its potential returns per unit of risk. BBB Foods is currently generating about -0.16 per unit of risk. If you would invest 5,421 in Allegheny Technologies Incorporated on August 31, 2024 and sell it today you would earn a total of 596.00 from holding Allegheny Technologies Incorporated or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Allegheny Technologies Incorpo vs. BBB Foods
Performance |
| Timeline |
| Allegheny Technologies |
| BBB Foods |
Allegheny Technologies and BBB Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegheny Technologies and BBB Foods
The main advantage of trading using opposite Allegheny Technologies and BBB Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegheny Technologies position performs unexpectedly, BBB Foods 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 BBB Foods will offset losses from the drop in BBB Foods' long position.| Allegheny Technologies vs. Worthington Industries | Allegheny Technologies vs. ESAB Corp | Allegheny Technologies vs. Insteel Industries | Allegheny Technologies vs. Northwest Pipe |
| BBB Foods vs. Citizens Bancorp Investment | BBB Foods vs. Stepstone Group | BBB Foods vs. Independence Realty Trust | BBB Foods vs. Western Sierra Mining |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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