Correlation Between Allegheny Technologies and Reitar Logtech

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

Diversification Opportunities for Allegheny Technologies and Reitar Logtech

0.07

Correlation Coefficient

Allegheny Technologies  Reitar Logtech

Significant diversification

The 3 months correlation between Allegheny and Reitar is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and Reitar Logtech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reitar Logtech Holdings 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 Reitar Logtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reitar Logtech Holdings has no effect on the direction of Allegheny Technologies i.e., Allegheny Technologies and Reitar Logtech go up and down completely randomly.

Pair Corralation between Allegheny Technologies and Reitar Logtech

Considering the 90-day investment horizon Allegheny Technologies Incorporated is expected to under-perform the Reitar Logtech. But the stock apears to be less risky and, when comparing its historical volatility, Allegheny Technologies Incorporated is 5.46 times less risky than Reitar Logtech. The stock trades about -0.12 of its potential returns per unit of risk. The Reitar Logtech Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  492.00  in Reitar Logtech Holdings on September 25, 2024 and sell it today you would lose (99.00) from holding Reitar Logtech Holdings or give up 20.12% of portfolio value over 90 days.

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

Allegheny Technologies Incorpo  vs.  Reitar Logtech Holdings

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 weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Reitar Logtech Holdings

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Reitar Logtech Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Reitar Logtech reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Allegheny Technologies and Reitar Logtech

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

The idea behind Allegheny Technologies Incorporated and Reitar Logtech Holdings 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.