Correlation Between Allegheny Technologies and DigiCom Berhad

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

Diversification Opportunities for Allegheny Technologies and DigiCom Berhad

-0.55

Correlation Coefficient

Allegheny Technologies  DigiCom Berhad

Excellent diversification

The 3 months correlation between Allegheny and DigiCom is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and DigiCom Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigiCom Berhad 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 DigiCom Berhad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DigiCom Berhad has no effect on the direction of Allegheny Technologies i.e., Allegheny Technologies and DigiCom Berhad go up and down completely randomly.

Pair Corralation between Allegheny Technologies and DigiCom Berhad

If you would invest  75.00  in DigiCom Berhad on October 10, 2024 and sell it today you would earn a total of  0.00  from holding DigiCom Berhad or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Allegheny Technologies Incorpo  vs.  DigiCom Berhad

Allegheny Technologies

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

DigiCom Berhad

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DigiCom Berhad has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, DigiCom Berhad is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Allegheny Technologies and DigiCom Berhad

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

The idea behind Allegheny Technologies Incorporated and DigiCom Berhad 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.