Correlation Between Old Dominion and Allient
Can any of the company-specific risk be diversified away by investing in both Old Dominion and Allient 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 Old Dominion and Allient into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Dominion Freight and Allient, you can compare the effects of market volatilities on Old Dominion and Allient 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 Old Dominion with a short position of Allient. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Dominion and Allient.
Diversification Opportunities for Old Dominion and Allient
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Old and Allient is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Old Dominion Freight and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient and Old Dominion 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 Old Dominion Freight are associated (or correlated) with Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of Old Dominion i.e., Old Dominion and Allient go up and down completely randomly.
Pair Corralation between Old Dominion and Allient
Given the investment horizon of 90 days Old Dominion is expected to generate 3.0 times less return on investment than Allient. In addition to that, Old Dominion is 1.01 times more volatile than Allient. It trades about 0.18 of its total potential returns per unit of risk. Allient is currently generating about 0.54 per unit of volatility. If you would invest 1,805 in Allient on August 29, 2024 and sell it today you would earn a total of 729.00 from holding Allient or generate 40.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Dominion Freight vs. Allient
Performance |
| Timeline |
| Old Dominion Freight |
| Allient |
Old Dominion and Allient Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Dominion and Allient
The main advantage of trading using opposite Old Dominion and Allient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Dominion position performs unexpectedly, Allient 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 Allient will offset losses from the drop in Allient's long position.| Old Dominion vs. ArcBest Corp | Old Dominion vs. Marten Transport | Old Dominion vs. Werner Enterprises | Old Dominion vs. Knight Transportation |
| Allient vs. Old Republic International | Allient vs. Cincinnati Financial | Allient vs. Palomar Holdings | Allient vs. Aegean Airlines SA |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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