Correlation Between Gap, and Allient

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

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

Diversification Opportunities for Gap, and Allient

0.45

Correlation Coefficient

Gap,  Allient

Very weak diversification

The 3 months correlation between Gap, and Allient is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding The Gap, and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient and Gap, 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 The Gap, are associated (or correlated) with Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of Gap, i.e., Gap, and Allient go up and down completely randomly.

Pair Corralation between Gap, and Allient

Considering the 90-day investment horizon The Gap, is expected to under-perform the Allient. In addition to that, Gap, is 1.19 times more volatile than Allient. It trades about -0.07 of its total potential returns per unit of risk. Allient is currently generating about 0.03 per unit of volatility. If you would invest  2,348  in Allient on December 20, 2024 and sell it today you would earn a total of  78.00  from holding Allient or generate 3.32% return on investment over 90 days.

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

The Gap,  vs.  Allient

Gap,

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Gap, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Allient

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Allient are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Allient is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Gap, and Allient

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

The idea behind The Gap, and Allient 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.