Correlation Between Powell Max and Allient

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

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

Diversification Opportunities for Powell Max and Allient

-0.45

Correlation Coefficient

Powell Max  Allient

Very good diversification

The 3 months correlation between Powell and Allient is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Powell Max Limited and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient and Powell Max 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 Powell Max Limited 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 Powell Max i.e., Powell Max and Allient go up and down completely randomly.

Pair Corralation between Powell Max and Allient

Given the investment horizon of 90 days Powell Max Limited is expected to under-perform the Allient. In addition to that, Powell Max is 4.08 times more volatile than Allient. It trades about -0.6 of its total potential returns per unit of risk. Allient is currently generating about 0.16 per unit of volatility. If you would invest  2,402  in Allient on October 25, 2024 and sell it today you would earn a total of  186.00  from holding Allient or generate 7.74% return on investment over 90 days.

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

Powell Max Limited  vs.  Allient

Powell Max Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Powell Max Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Allient

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allient are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Allient unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Powell Max and Allient

The main advantage of trading using opposite Powell Max and Allient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Powell Max 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 Powell Max Limited 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.