Correlation Between Allegheny Technologies and Thyssenkrupp
Can any of the company-specific risk be diversified away by investing in both Allegheny Technologies and Thyssenkrupp 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 Thyssenkrupp 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 Thyssenkrupp AG ON, you can compare the effects of market volatilities on Allegheny Technologies and Thyssenkrupp 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 Thyssenkrupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegheny Technologies and Thyssenkrupp.
Diversification Opportunities for Allegheny Technologies and Thyssenkrupp
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Allegheny and Thyssenkrupp is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and Thyssenkrupp AG ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thyssenkrupp AG ON 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 Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thyssenkrupp AG ON has no effect on the direction of Allegheny Technologies i.e., Allegheny Technologies and Thyssenkrupp go up and down completely randomly.
Pair Corralation between Allegheny Technologies and Thyssenkrupp
Considering the 90-day investment horizon Allegheny Technologies Incorporated is expected to under-perform the Thyssenkrupp. But the stock apears to be less risky and, when comparing its historical volatility, Allegheny Technologies Incorporated is 2.22 times less risky than Thyssenkrupp. The stock trades about -0.1 of its potential returns per unit of risk. The Thyssenkrupp AG ON is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 365.00 in Thyssenkrupp AG ON on September 24, 2024 and sell it today you would earn a total of 60.00 from holding Thyssenkrupp AG ON or generate 16.44% 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. Thyssenkrupp AG ON
Performance |
Timeline |
Allegheny Technologies |
Thyssenkrupp AG ON |
Allegheny Technologies and Thyssenkrupp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Allegheny Technologies and Thyssenkrupp
The main advantage of trading using opposite Allegheny Technologies and Thyssenkrupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegheny Technologies position performs unexpectedly, Thyssenkrupp 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 Thyssenkrupp will offset losses from the drop in Thyssenkrupp's long position.Allegheny Technologies vs. ESAB Corp | Allegheny Technologies vs. Insteel Industries | Allegheny Technologies vs. Northwest Pipe | Allegheny Technologies vs. Gulf Island Fabrication |
Thyssenkrupp vs. ESAB Corp | Thyssenkrupp vs. Worthington Industries | Thyssenkrupp vs. Allegheny Technologies Incorporated | Thyssenkrupp 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |