Correlation Between Allient and SVELEV

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

By analyzing existing cross correlation between Allient and SVELEV 28 10 FEB 51, you can compare the effects of market volatilities on Allient and SVELEV 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 Allient with a short position of SVELEV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allient and SVELEV.

Diversification Opportunities for Allient and SVELEV

-0.88

Correlation Coefficient

Allient  SVELEV

Pay attention - limited upside

The 3 months correlation between Allient and SVELEV is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Allient and SVELEV 28 10 FEB 51 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SVELEV 28 10 and Allient 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 Allient are associated (or correlated) with SVELEV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SVELEV 28 10 has no effect on the direction of Allient i.e., Allient and SVELEV go up and down completely randomly.

Pair Corralation between Allient and SVELEV

Given the investment horizon of 90 days Allient is expected to under-perform the SVELEV. But the stock apears to be less risky and, when comparing its historical volatility, Allient is 1.3 times less risky than SVELEV. The stock trades about -0.04 of its potential returns per unit of risk. The SVELEV 28 10 FEB 51 is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  6,143  in SVELEV 28 10 FEB 51 on October 7, 2024 and sell it today you would earn a total of  197.00  from holding SVELEV 28 10 FEB 51 or generate 3.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	20.0%
Values	Daily Returns

Allient  vs.  SVELEV 28 10 FEB 51

Allient

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allient are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Allient unveiled solid returns over the last few months and may actually be approaching a breakup point.

SVELEV 28 10

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SVELEV 28 10 FEB 51 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, SVELEV is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Allient and SVELEV

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

The idea behind Allient and SVELEV 28 10 FEB 51 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.

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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.