Correlation Between Triumph and Allete

Can any of the company-specific risk be diversified away by investing in both Triumph and Allete 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 Triumph and Allete into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Triumph Group and Allete Inc, you can compare the effects of market volatilities on Triumph and Allete 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 Triumph with a short position of Allete. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triumph and Allete.

Diversification Opportunities for Triumph and Allete

0.31

Correlation Coefficient

Triumph  Allete

Weak diversification

The 3 months correlation between Triumph and Allete is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Triumph Group and Allete Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allete Inc and Triumph 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 Triumph Group are associated (or correlated) with Allete. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allete Inc has no effect on the direction of Triumph i.e., Triumph and Allete go up and down completely randomly.

Pair Corralation between Triumph and Allete

Considering the 90-day investment horizon Triumph Group is expected to generate 289.99 times more return on investment than Allete. However, Triumph is 289.99 times more volatile than Allete Inc. It trades about 0.13 of its potential returns per unit of risk. Allete Inc is currently generating about 0.09 per unit of risk. If you would invest  2,551  in Triumph Group on May 6, 2025 and sell it today you would earn a total of  23,149  from holding Triumph Group or generate 907.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

Triumph Group  vs.  Allete Inc

Triumph Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Triumph Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, Triumph demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Allete Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Allete Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Allete is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Triumph and Allete

The main advantage of trading using opposite Triumph and Allete positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triumph position performs unexpectedly, Allete 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 Allete will offset losses from the drop in Allete's long position.

The idea behind Triumph Group and Allete Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.