Correlation Between Chemtrade Logistics and Allegheny Technologies

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Chemtrade Logistics and Allegheny Technologies 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 Chemtrade Logistics and Allegheny Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemtrade Logistics Income and Allegheny Technologies Incorporated, you can compare the effects of market volatilities on Chemtrade Logistics and Allegheny Technologies 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 Chemtrade Logistics with a short position of Allegheny Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemtrade Logistics and Allegheny Technologies.

Diversification Opportunities for Chemtrade Logistics and Allegheny Technologies

-0.08
  Correlation Coefficient

Good diversification

The 3 months correlation between Chemtrade and Allegheny is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Chemtrade Logistics Income and Allegheny Technologies Incorpo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegheny Technologies and Chemtrade Logistics 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 Chemtrade Logistics Income are associated (or correlated) with Allegheny Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegheny Technologies has no effect on the direction of Chemtrade Logistics i.e., Chemtrade Logistics and Allegheny Technologies go up and down completely randomly.

Pair Corralation between Chemtrade Logistics and Allegheny Technologies

Assuming the 90 days horizon Chemtrade Logistics Income is expected to under-perform the Allegheny Technologies. In addition to that, Chemtrade Logistics is 1.5 times more volatile than Allegheny Technologies Incorporated. It trades about -0.05 of its total potential returns per unit of risk. Allegheny Technologies Incorporated is currently generating about -0.01 per unit of volatility. If you would invest  5,619  in Allegheny Technologies Incorporated on September 15, 2024 and sell it today you would lose (18.00) from holding Allegheny Technologies Incorporated or give up 0.32% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Chemtrade Logistics Income  vs.  Allegheny Technologies Incorpo

 Performance 
       Timeline  
Chemtrade Logistics 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Chemtrade Logistics Income are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, Chemtrade Logistics may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Allegheny Technologies 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Allegheny Technologies Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Chemtrade Logistics and Allegheny Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Chemtrade Logistics and Allegheny Technologies

The main advantage of trading using opposite Chemtrade Logistics and Allegheny Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemtrade Logistics position performs unexpectedly, Allegheny Technologies 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 Allegheny Technologies will offset losses from the drop in Allegheny Technologies' long position.
The idea behind Chemtrade Logistics Income and Allegheny Technologies Incorporated pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

Other Complementary Tools

Transaction History
View history of all your transactions and understand their impact on performance
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Bonds Directory
Find actively traded corporate debentures issued by US companies
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format