Correlation Between Duluth Holdings and Allegheny Technologies
Can any of the company-specific risk be diversified away by investing in both Duluth Holdings 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 Duluth Holdings and Allegheny Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duluth Holdings and Allegheny Technologies Incorporated, you can compare the effects of market volatilities on Duluth Holdings 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 Duluth Holdings with a short position of Allegheny Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duluth Holdings and Allegheny Technologies.
Diversification Opportunities for Duluth Holdings and Allegheny Technologies
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Duluth and Allegheny is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Duluth Holdings and Allegheny Technologies Incorpo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegheny Technologies and Duluth Holdings 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 Duluth Holdings 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 Duluth Holdings i.e., Duluth Holdings and Allegheny Technologies go up and down completely randomly.
Pair Corralation between Duluth Holdings and Allegheny Technologies
Given the investment horizon of 90 days Duluth Holdings is expected to under-perform the Allegheny Technologies. In addition to that, Duluth Holdings is 1.2 times more volatile than Allegheny Technologies Incorporated. It trades about -0.02 of its total potential returns per unit of risk. Allegheny Technologies Incorporated is currently generating about 0.07 per unit of volatility. If you would invest 3,007 in Allegheny Technologies Incorporated on September 3, 2024 and sell it today you would earn a total of 3,010 from holding Allegheny Technologies Incorporated or generate 100.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duluth Holdings vs. Allegheny Technologies Incorpo
Performance |
| Timeline |
| Duluth Holdings |
| Allegheny Technologies |
Duluth Holdings and Allegheny Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duluth Holdings and Allegheny Technologies
The main advantage of trading using opposite Duluth Holdings and Allegheny Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duluth Holdings 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.| Duluth Holdings vs. Zumiez Inc | Duluth Holdings vs. JJill Inc | Duluth Holdings vs. Shoe Carnival | Duluth Holdings vs. Cato Corporation |
| Allegheny Technologies vs. Worthington Industries | Allegheny Technologies vs. ESAB Corp | Allegheny Technologies vs. Insteel Industries | Allegheny Technologies vs. Northwest Pipe |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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