Correlation Between Allegheny Technologies and Thyssenkrupp
Can any of the company-specific risk be diversified away by investing in both Allegheny Technologies and Thyssenkrupp 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 Thyssenkrupp 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 Thyssenkrupp AG ON, you can compare the effects of market volatilities on Allegheny Technologies and Thyssenkrupp 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 Thyssenkrupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegheny Technologies and Thyssenkrupp.
Diversification Opportunities for Allegheny Technologies and Thyssenkrupp
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Allegheny and Thyssenkrupp is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and Thyssenkrupp AG ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thyssenkrupp AG ON 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 Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thyssenkrupp AG ON has no effect on the direction of Allegheny Technologies i.e., Allegheny Technologies and Thyssenkrupp go up and down completely randomly.
Pair Corralation between Allegheny Technologies and Thyssenkrupp
Considering the 90-day investment horizon Allegheny Technologies is expected to generate 9.56 times less return on investment than Thyssenkrupp. But when comparing it to its historical volatility, Allegheny Technologies Incorporated is 2.7 times less risky than Thyssenkrupp. It trades about 0.05 of its potential returns per unit of risk. Thyssenkrupp AG ON is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 406.00 in Thyssenkrupp AG ON on November 4, 2024 and sell it today you would earn a total of 79.00 from holding Thyssenkrupp AG ON or generate 19.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allegheny Technologies Incorpo vs. Thyssenkrupp AG ON
Performance |
| Timeline |
| Allegheny Technologies |
| Thyssenkrupp AG ON |
Allegheny Technologies and Thyssenkrupp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegheny Technologies and Thyssenkrupp
The main advantage of trading using opposite Allegheny Technologies and Thyssenkrupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegheny Technologies position performs unexpectedly, Thyssenkrupp 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 Thyssenkrupp will offset losses from the drop in Thyssenkrupp's long position.| Allegheny Technologies vs. Worthington Industries | Allegheny Technologies vs. ESAB Corp | Allegheny Technologies vs. Insteel Industries | Allegheny Technologies vs. Northwest Pipe |
| Thyssenkrupp vs. ESAB Corp | Thyssenkrupp vs. Worthington Industries | Thyssenkrupp vs. Allegheny Technologies Incorporated | Thyssenkrupp vs. Insteel Industries |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |