Correlation Between Tefron and Allison Transmission
Can any of the company-specific risk be diversified away by investing in both Tefron and Allison Transmission 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 Tefron and Allison Transmission into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tefron and Allison Transmission Holdings, you can compare the effects of market volatilities on Tefron and Allison Transmission 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 Tefron with a short position of Allison Transmission. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tefron and Allison Transmission.
Diversification Opportunities for Tefron and Allison Transmission
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tefron and Allison is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Tefron and Allison Transmission Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allison Transmission and Tefron 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 Tefron are associated (or correlated) with Allison Transmission. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allison Transmission has no effect on the direction of Tefron i.e., Tefron and Allison Transmission go up and down completely randomly.
Pair Corralation between Tefron and Allison Transmission
If you would invest 7,431 in Allison Transmission Holdings on August 30, 2024 and sell it today you would earn a total of 4,427 from holding Allison Transmission Holdings or generate 59.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
Tefron vs. Allison Transmission Holdings
Performance |
| Timeline |
| Tefron |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Allison Transmission |
Tefron and Allison Transmission Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tefron and Allison Transmission
The main advantage of trading using opposite Tefron and Allison Transmission positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tefron position performs unexpectedly, Allison Transmission 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 Allison Transmission will offset losses from the drop in Allison Transmission's long position.| Tefron vs. BJs Restaurants | Tefron vs. Shake Shack | Tefron vs. BBB Foods | Tefron vs. Grocery Outlet Holding |
| Allison Transmission vs. Gentex | Allison Transmission vs. Adient PLC | Allison Transmission vs. Autoliv | Allison Transmission vs. Fox Factory Holding |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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