Correlation Between Allegheny Technologies and China International
Can any of the company-specific risk be diversified away by investing in both Allegheny Technologies and China International 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 Allegheny Technologies and China International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allegheny Technologies Incorporated and China International Marine, you can compare the effects of market volatilities on Allegheny Technologies and China International 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 Allegheny Technologies with a short position of China International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegheny Technologies and China International.
Diversification Opportunities for Allegheny Technologies and China International
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Allegheny and China is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and China International Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China International and Allegheny Technologies 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 Allegheny Technologies Incorporated are associated (or correlated) with China International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China International has no effect on the direction of Allegheny Technologies i.e., Allegheny Technologies and China International go up and down completely randomly.
Pair Corralation between Allegheny Technologies and China International
Assuming the 90 days horizon Allegheny Technologies Incorporated is expected to under-perform the China International. But the stock apears to be less risky and, when comparing its historical volatility, Allegheny Technologies Incorporated is 1.98 times less risky than China International. The stock trades about -0.06 of its potential returns per unit of risk. The China International Marine is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 56.00 in China International Marine on September 25, 2024 and sell it today you would earn a total of 6.00 from holding China International Marine or generate 10.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
Allegheny Technologies Incorpo vs. China International Marine
Performance |
Timeline |
Allegheny Technologies |
China International |
Allegheny Technologies and China International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Allegheny Technologies and China International
The main advantage of trading using opposite Allegheny Technologies and China International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegheny Technologies position performs unexpectedly, China International 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 China International will offset losses from the drop in China International's long position.Allegheny Technologies vs. China International Marine | Allegheny Technologies vs. thyssenkrupp AG | Allegheny Technologies vs. thyssenkrupp AG | Allegheny Technologies vs. Mueller Industries |
China International vs. Allegheny Technologies Incorporated | China International vs. thyssenkrupp AG | China International vs. thyssenkrupp AG | China International vs. Mueller 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 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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