Correlation Between Allegheny Technologies and CROWN

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

Diversification Opportunities for Allegheny Technologies and CROWN

0.57

Correlation Coefficient

Allegheny Technologies  CROWN

Very weak diversification

The 3 months correlation between Allegheny and CROWN is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and CROWN CASTLE INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CROWN CASTLE INTL 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 CROWN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CROWN CASTLE INTL has no effect on the direction of Allegheny Technologies i.e., Allegheny Technologies and CROWN go up and down completely randomly.

Pair Corralation between Allegheny Technologies and CROWN

Considering the 90-day investment horizon Allegheny Technologies Incorporated is expected to under-perform the CROWN. In addition to that, Allegheny Technologies is 7.84 times more volatile than CROWN CASTLE INTL. It trades about -0.11 of its total potential returns per unit of risk. CROWN CASTLE INTL is currently generating about -0.15 per unit of volatility. If you would invest  9,943  in CROWN CASTLE INTL on September 24, 2024 and sell it today you would lose (255.00) from holding CROWN CASTLE INTL or give up 2.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Allegheny Technologies Incorpo  vs.  CROWN CASTLE INTL

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.

CROWN CASTLE INTL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CROWN CASTLE INTL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CROWN is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Allegheny Technologies and CROWN

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

The idea behind Allegheny Technologies Incorporated and CROWN CASTLE INTL 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.