Correlation Between Allegheny Technologies and Alcoa Corp
Can any of the company-specific risk be diversified away by investing in both Allegheny Technologies and Alcoa Corp 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 Alcoa Corp 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 Alcoa Corp, you can compare the effects of market volatilities on Allegheny Technologies and Alcoa Corp 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 Alcoa Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegheny Technologies and Alcoa Corp.
Diversification Opportunities for Allegheny Technologies and Alcoa Corp
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Allegheny and Alcoa is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and Alcoa Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcoa Corp 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 Alcoa Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alcoa Corp has no effect on the direction of Allegheny Technologies i.e., Allegheny Technologies and Alcoa Corp go up and down completely randomly.
Pair Corralation between Allegheny Technologies and Alcoa Corp
Considering the 90-day investment horizon Allegheny Technologies is expected to generate 2.95 times less return on investment than Alcoa Corp. But when comparing it to its historical volatility, Allegheny Technologies Incorporated is 1.8 times less risky than Alcoa Corp. It trades about 0.21 of its potential returns per unit of risk. Alcoa Corp is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 2,967 in Alcoa Corp on January 19, 2024 and sell it today you would earn a total of 588.00 from holding Alcoa Corp or generate 19.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allegheny Technologies Incorpo vs. Alcoa Corp
Performance |
| Timeline |
| Allegheny Technologies |
| Alcoa Corp |
Allegheny Technologies and Alcoa Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegheny Technologies and Alcoa Corp
The main advantage of trading using opposite Allegheny Technologies and Alcoa Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegheny Technologies position performs unexpectedly, Alcoa Corp 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 Alcoa Corp will offset losses from the drop in Alcoa Corp's long position.| Allegheny Technologies vs. Ampco Pittsburgh | Allegheny Technologies vs. ESAB Corp | Allegheny Technologies vs. Mayville Engineering Co | Allegheny Technologies vs. Mueller Industries |
| Alcoa Corp vs. Immutep Ltd ADR | Alcoa Corp vs. Home Federal Bancorp | Alcoa Corp vs. Anheuser Busch Inbev | Alcoa Corp vs. Marker Therapeutics |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |