Correlation Between Western Acquisition and Allient
Can any of the company-specific risk be diversified away by investing in both Western Acquisition 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 Western Acquisition and Allient into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Acquisition Ventures and Allient, you can compare the effects of market volatilities on Western Acquisition 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 Western Acquisition with a short position of Allient. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Acquisition and Allient.
Diversification Opportunities for Western Acquisition and Allient
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Allient is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Western Acquisition Ventures and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient and Western Acquisition 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 Western Acquisition Ventures 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 Western Acquisition i.e., Western Acquisition and Allient go up and down completely randomly.
Pair Corralation between Western Acquisition and Allient
Given the investment horizon of 90 days Western Acquisition Ventures is expected to under-perform the Allient. But the stock apears to be less risky and, when comparing its historical volatility, Western Acquisition Ventures is 1.34 times less risky than Allient. The stock trades about -0.06 of its potential returns per unit of risk. The Allient is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 2,336 in Allient on September 12, 2024 and sell it today you would earn a total of 399.00 from holding Allient or generate 17.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Acquisition Ventures vs. Allient
Performance |
| Timeline |
| Western Acquisition |
| Allient |
Western Acquisition and Allient Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Acquisition and Allient
The main advantage of trading using opposite Western Acquisition and Allient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Acquisition 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.| Western Acquisition vs. HUMANA INC | Western Acquisition vs. Barloworld Ltd ADR | Western Acquisition vs. Morningstar Unconstrained Allocation | Western Acquisition vs. Thrivent High Yield |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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