Correlation Between Allegheny Technologies and Superior Plus

Can any of the company-specific risk be diversified away by investing in both Allegheny Technologies and Superior Plus 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 Superior Plus 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 Superior Plus Corp, you can compare the effects of market volatilities on Allegheny Technologies and Superior Plus 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 Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegheny Technologies and Superior Plus.

Diversification Opportunities for Allegheny Technologies and Superior Plus

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Correlation Coefficient

Allegheny Technologies  Superior Plus

Pay attention - limited upside

The 3 months correlation between Allegheny and Superior is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus 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 Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of Allegheny Technologies i.e., Allegheny Technologies and Superior Plus go up and down completely randomly.

Pair Corralation between Allegheny Technologies and Superior Plus

Assuming the 90 days horizon Allegheny Technologies Incorporated is expected to generate 0.49 times more return on investment than Superior Plus. However, Allegheny Technologies Incorporated is 2.05 times less risky than Superior Plus. It trades about 0.02 of its potential returns per unit of risk. Superior Plus Corp is currently generating about -0.01 per unit of risk. If you would invest  5,308  in Allegheny Technologies Incorporated on October 11, 2024 and sell it today you would earn a total of  14.00  from holding Allegheny Technologies Incorporated or generate 0.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Allegheny Technologies Incorpo  vs.  Superior Plus Corp

Allegheny Technologies

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Allegheny Technologies Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Allegheny Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Superior Plus Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Superior Plus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Superior Plus is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Allegheny Technologies and Superior Plus

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

The idea behind Allegheny Technologies Incorporated and Superior Plus Corp 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.