Correlation Between Allegheny Technologies and United States
Can any of the company-specific risk be diversified away by investing in both Allegheny Technologies and United States 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 United States 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 United States Steel, you can compare the effects of market volatilities on Allegheny Technologies and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegheny Technologies and United States.
Diversification Opportunities for Allegheny Technologies and United States
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Allegheny and United is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of Allegheny Technologies i.e., Allegheny Technologies and United States go up and down completely randomly.
Pair Corralation between Allegheny Technologies and United States
Considering the 90-day investment horizon Allegheny Technologies is expected to generate 27.73 times less return on investment than United States. But when comparing it to its historical volatility, Allegheny Technologies Incorporated is 1.2 times less risky than United States. It trades about 0.0 of its potential returns per unit of risk. United States Steel is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,673 in United States Steel on August 26, 2024 and sell it today you would earn a total of 230.00 from holding United States Steel or generate 6.26% 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. United States Steel
Performance |
| Timeline |
| Allegheny Technologies |
| United States Steel |
Allegheny Technologies and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegheny Technologies and United States
The main advantage of trading using opposite Allegheny Technologies and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegheny Technologies position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Allegheny Technologies vs. Worthington Industries | Allegheny Technologies vs. Haynes International | Allegheny Technologies vs. ESAB Corp | Allegheny Technologies vs. Insteel Industries |
| United States vs. Nucor Corp | United States vs. Steel Dynamics | United States vs. ArcelorMittal SA ADR | United States vs. Gerdau SA ADR |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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