Correlation Between Allegheny Technologies and SOUTHWESTERN
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By analyzing existing cross correlation between Allegheny Technologies Incorporated and SOUTHWESTERN ELEC PWR, you can compare the effects of market volatilities on Allegheny Technologies and SOUTHWESTERN 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 SOUTHWESTERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegheny Technologies and SOUTHWESTERN.
Diversification Opportunities for Allegheny Technologies and SOUTHWESTERN
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Allegheny and SOUTHWESTERN is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and SOUTHWESTERN ELEC PWR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHWESTERN ELEC PWR 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 SOUTHWESTERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHWESTERN ELEC PWR has no effect on the direction of Allegheny Technologies i.e., Allegheny Technologies and SOUTHWESTERN go up and down completely randomly.
Pair Corralation between Allegheny Technologies and SOUTHWESTERN
Considering the 90-day investment horizon Allegheny Technologies Incorporated is expected to generate 3.64 times more return on investment than SOUTHWESTERN. However, Allegheny Technologies is 3.64 times more volatile than SOUTHWESTERN ELEC PWR. It trades about 0.05 of its potential returns per unit of risk. SOUTHWESTERN ELEC PWR is currently generating about 0.01 per unit of risk. If you would invest 4,398 in Allegheny Technologies Incorporated on September 12, 2024 and sell it today you would earn a total of 1,330 from holding Allegheny Technologies Incorporated or generate 30.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 88.22% |
| Values | Daily Returns |
Allegheny Technologies Incorpo vs. SOUTHWESTERN ELEC PWR
Performance |
| Timeline |
| Allegheny Technologies |
| SOUTHWESTERN ELEC PWR |
Allegheny Technologies and SOUTHWESTERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegheny Technologies and SOUTHWESTERN
The main advantage of trading using opposite Allegheny Technologies and SOUTHWESTERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegheny Technologies position performs unexpectedly, SOUTHWESTERN 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 SOUTHWESTERN will offset losses from the drop in SOUTHWESTERN's long position.| Allegheny Technologies vs. Worthington Industries | Allegheny Technologies vs. ESAB Corp | Allegheny Technologies vs. Insteel Industries | Allegheny Technologies vs. Northwest Pipe |
| SOUTHWESTERN vs. Insteel Industries | SOUTHWESTERN vs. Allegheny Technologies Incorporated | SOUTHWESTERN vs. Ironveld Plc | SOUTHWESTERN vs. Merit Medical Systems |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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