Correlation Between Allied Gold and Materion

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

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

Diversification Opportunities for Allied Gold and Materion

0.58

Correlation Coefficient

Allied Gold  Materion

Very weak diversification

The 3 months correlation between Allied and Materion is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Allied Gold and Materion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materion and Allied Gold 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 Allied Gold are associated (or correlated) with Materion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materion has no effect on the direction of Allied Gold i.e., Allied Gold and Materion go up and down completely randomly.

Pair Corralation between Allied Gold and Materion

Given the investment horizon of 90 days Allied Gold is expected to generate 1.59 times more return on investment than Materion. However, Allied Gold is 1.59 times more volatile than Materion. It trades about 0.12 of its potential returns per unit of risk. Materion is currently generating about 0.03 per unit of risk. If you would invest  1,803  in Allied Gold on October 6, 2025 and sell it today you would earn a total of  508.00  from holding Allied Gold or generate 28.18% return on investment over 90 days.

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

Allied Gold  vs.  Materion

Allied Gold

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Allied Gold are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Allied Gold exhibited solid returns over the last few months and may actually be approaching a breakup point.

Materion

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Materion are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Materion is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Allied Gold and Materion

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

The idea behind Allied Gold and Materion 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.