Correlation Between Allient and WesBanco

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

By analyzing existing cross correlation between Allient and WesBanco, you can compare the effects of market volatilities on Allient and WesBanco 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 WesBanco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allient and WesBanco.

Diversification Opportunities for Allient and WesBanco

0.87

Correlation Coefficient

Allient  WesBanco

Very poor diversification

The 3 months correlation between Allient and WesBanco is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Allient and WesBanco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WesBanco 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 WesBanco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WesBanco has no effect on the direction of Allient i.e., Allient and WesBanco go up and down completely randomly.

Pair Corralation between Allient and WesBanco

Given the investment horizon of 90 days Allient is expected to under-perform the WesBanco. In addition to that, Allient is 9.29 times more volatile than WesBanco. It trades about -0.18 of its total potential returns per unit of risk. WesBanco is currently generating about 0.09 per unit of volatility. If you would invest  2,530  in WesBanco on October 8, 2024 and sell it today you would earn a total of  11.00  from holding WesBanco or generate 0.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Allient  vs.  WesBanco

Allient

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allient are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Allient unveiled solid returns over the last few months and may actually be approaching a breakup point.

WesBanco

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WesBanco are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, WesBanco is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Allient and WesBanco

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

The idea behind Allient and WesBanco 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.