Correlation Between Juniata Valley and Allient

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

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

Diversification Opportunities for Juniata Valley and Allient

0.02

Correlation Coefficient

Juniata Valley  Allient

Significant diversification

The 3 months correlation between Juniata and Allient is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Juniata Valley Financial and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient and Juniata Valley 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 Juniata Valley Financial 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 Juniata Valley i.e., Juniata Valley and Allient go up and down completely randomly.

Pair Corralation between Juniata Valley and Allient

Given the investment horizon of 90 days Juniata Valley Financial is expected to generate 0.92 times more return on investment than Allient. However, Juniata Valley Financial is 1.09 times less risky than Allient. It trades about -0.01 of its potential returns per unit of risk. Allient is currently generating about -0.02 per unit of risk. If you would invest  1,292  in Juniata Valley Financial on December 26, 2024 and sell it today you would lose (42.00) from holding Juniata Valley Financial or give up 3.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Juniata Valley Financial  vs.  Allient

Juniata Valley Financial

Risk-Adjusted Performance

Very Weak

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

Allient

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allient has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Allient is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Juniata Valley and Allient

The main advantage of trading using opposite Juniata Valley and Allient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juniata Valley 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 Juniata Valley Financial 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.