Correlation Between NYSE Composite and Allegheny Technologies
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Allegheny Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Allegheny Technologies Incorporated, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Allegheny Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Allegheny Technologies.
Diversification Opportunities for NYSE Composite and Allegheny Technologies
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Allegheny is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Allegheny Technologies Incorpo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegheny Technologies and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Allegheny Technologies go up and down completely randomly.
Pair Corralation between NYSE Composite and Allegheny Technologies
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.72 times less return on investment than Allegheny Technologies. But when comparing it to its historical volatility, NYSE Composite is 3.17 times less risky than Allegheny Technologies. It trades about 0.08 of its potential returns per unit of risk. Allegheny Technologies Incorporated is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,115 in Allegheny Technologies Incorporated on August 27, 2024 and sell it today you would earn a total of 2,815 from holding Allegheny Technologies Incorporated or generate 90.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Allegheny Technologies Incorpo
Performance |
| Timeline |
NYSE Composite and Allegheny Technologies Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Allegheny Technologies Incorporated
Pair trading matchups for Allegheny Technologies
Pair Trading with NYSE Composite and Allegheny Technologies
The main advantage of trading using opposite NYSE Composite and Allegheny Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Allegheny Technologies vs. Worthington Industries | Allegheny Technologies vs. Haynes International | Allegheny Technologies vs. ESAB Corp | Allegheny Technologies vs. Insteel Industries |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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