Correlation Between Bank of Montreal and Allegheny Technologies
Can any of the company-specific risk be diversified away by investing in both Bank of Montreal 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 Bank of Montreal and Allegheny Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Montreal and Allegheny Technologies Incorporated, you can compare the effects of market volatilities on Bank of Montreal 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 Bank of Montreal with a short position of Allegheny Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Montreal and Allegheny Technologies.
Diversification Opportunities for Bank of Montreal and Allegheny Technologies
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Allegheny is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Montreal and Allegheny Technologies Incorpo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegheny Technologies and Bank of Montreal 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 Bank of Montreal 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 Bank of Montreal i.e., Bank of Montreal and Allegheny Technologies go up and down completely randomly.
Pair Corralation between Bank of Montreal and Allegheny Technologies
Assuming the 90 days horizon Bank of Montreal is expected to generate 0.6 times more return on investment than Allegheny Technologies. However, Bank of Montreal is 1.68 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 -0.08 per unit of risk. If you would invest 7,875 in Bank of Montreal on September 26, 2024 and sell it today you would earn a total of 1,367 from holding Bank of Montreal or generate 17.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bank of Montreal vs. Allegheny Technologies Incorpo
Performance |
Timeline |
Bank of Montreal |
Allegheny Technologies |
Bank of Montreal and Allegheny Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of Montreal and Allegheny Technologies
The main advantage of trading using opposite Bank of Montreal and Allegheny Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Montreal 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.Bank of Montreal vs. INDCOMMBK CHINA ADR20 | Bank of Montreal vs. Industrial and Commercial | Bank of Montreal vs. CHINA BANK ADR20 | Bank of Montreal vs. AGRICULTBK HADR25 YC |
Allegheny Technologies vs. China International Marine | Allegheny Technologies vs. thyssenkrupp AG | Allegheny Technologies vs. thyssenkrupp AG | Allegheny Technologies 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
CEOs Directory Screen CEOs from public companies around the world | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |