Correlation Between Easy Software and Allegheny Technologies
Can any of the company-specific risk be diversified away by investing in both Easy Software 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 Easy Software and Allegheny Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Easy Software AG and Allegheny Technologies Incorporated, you can compare the effects of market volatilities on Easy Software 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 Easy Software with a short position of Allegheny Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Easy Software and Allegheny Technologies.
Diversification Opportunities for Easy Software and Allegheny Technologies
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Easy and Allegheny is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Easy Software AG and Allegheny Technologies Incorpo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegheny Technologies and Easy Software 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 Easy Software AG 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 Easy Software i.e., Easy Software and Allegheny Technologies go up and down completely randomly.
Pair Corralation between Easy Software and Allegheny Technologies
Assuming the 90 days trading horizon Easy Software is expected to generate 1.43 times less return on investment than Allegheny Technologies. In addition to that, Easy Software is 1.15 times more volatile than Allegheny Technologies Incorporated. It trades about 0.03 of its total potential returns per unit of risk. Allegheny Technologies Incorporated is currently generating about 0.05 per unit of volatility. If you would invest 3,620 in Allegheny Technologies Incorporated on November 5, 2024 and sell it today you would earn a total of 1,948 from holding Allegheny Technologies Incorporated or generate 53.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Easy Software AG vs. Allegheny Technologies Incorpo
Performance |
| Timeline |
| Easy Software AG |
| Allegheny Technologies |
Easy Software and Allegheny Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Easy Software and Allegheny Technologies
The main advantage of trading using opposite Easy Software and Allegheny Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Easy Software 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.| Easy Software vs. Sunny Optical Technology | Easy Software vs. Agilent Technologies | Easy Software vs. AAC TECHNOLOGHLDGADR | Easy Software vs. Kingdee International Software |
| Allegheny Technologies vs. SILVER BULLET DATA | Allegheny Technologies vs. Information Services International Dentsu | Allegheny Technologies vs. Virtu Financial | Allegheny Technologies vs. MICRONIC MYDATA |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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