Correlation Between Turning Point and Allegheny Technologies
Can any of the company-specific risk be diversified away by investing in both Turning Point 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 Turning Point and Allegheny Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turning Point Brands and Allegheny Technologies Incorporated, you can compare the effects of market volatilities on Turning Point 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 Turning Point with a short position of Allegheny Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turning Point and Allegheny Technologies.
Diversification Opportunities for Turning Point and Allegheny Technologies
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Turning and Allegheny is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands and Allegheny Technologies Incorpo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegheny Technologies and Turning Point 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 Turning Point Brands 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 Turning Point i.e., Turning Point and Allegheny Technologies go up and down completely randomly.
Pair Corralation between Turning Point and Allegheny Technologies
Considering the 90-day investment horizon Turning Point Brands is expected to generate 0.82 times more return on investment than Allegheny Technologies. However, Turning Point Brands is 1.22 times less risky than Allegheny Technologies. It trades about 0.2 of its potential returns per unit of risk. Allegheny Technologies Incorporated is currently generating about 0.07 per unit of risk. If you would invest 2,411 in Turning Point Brands on August 29, 2024 and sell it today you would earn a total of 3,819 from holding Turning Point Brands or generate 158.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Turning Point Brands vs. Allegheny Technologies Incorpo
Performance |
| Timeline |
| Turning Point Brands |
| Allegheny Technologies |
Turning Point and Allegheny Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Turning Point and Allegheny Technologies
The main advantage of trading using opposite Turning Point and Allegheny Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turning Point 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.| Turning Point vs. Imperial Brands PLC | Turning Point vs. Philip Morris International | Turning Point vs. Japan Tobacco ADR | Turning Point vs. Imperial Brands PLC |
| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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