Correlation Between Magna International and Allegheny
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By analyzing existing cross correlation between Magna International and Allegheny Technologies 5875, you can compare the effects of market volatilities on Magna International and Allegheny 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 Magna International with a short position of Allegheny. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magna International and Allegheny.
Diversification Opportunities for Magna International and Allegheny
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Magna and Allegheny is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Magna International and Allegheny Technologies 5875 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegheny Technologies and Magna International 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 Magna International are associated (or correlated) with Allegheny. 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 Magna International i.e., Magna International and Allegheny go up and down completely randomly.
Pair Corralation between Magna International and Allegheny
Considering the 90-day investment horizon Magna International is expected to under-perform the Allegheny. In addition to that, Magna International is 1.2 times more volatile than Allegheny Technologies 5875. It trades about -0.03 of its total potential returns per unit of risk. Allegheny Technologies 5875 is currently generating about 0.01 per unit of volatility. If you would invest 9,566 in Allegheny Technologies 5875 on September 14, 2024 and sell it today you would earn a total of 40.00 from holding Allegheny Technologies 5875 or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.54% |
| Values | Daily Returns |
Magna International vs. Allegheny Technologies 5875
Performance |
| Timeline |
| Magna International |
| Allegheny Technologies |
Magna International and Allegheny Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magna International and Allegheny
The main advantage of trading using opposite Magna International and Allegheny positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magna International position performs unexpectedly, Allegheny 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 will offset losses from the drop in Allegheny's long position.| Magna International vs. Allison Transmission Holdings | Magna International vs. Aptiv PLC | Magna International vs. LKQ Corporation | Magna International vs. Lear Corporation |
| Allegheny vs. Visteon Corp | Allegheny vs. Planet Fitness | Allegheny vs. Magna International | Allegheny vs. Brunswick |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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