Correlation Between Allegheny Technologies and FLOW TRADERS

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

Diversification Opportunities for Allegheny Technologies and FLOW TRADERS

0.19

Correlation Coefficient

Allegheny Technologies  FLOW TRADERS

Average diversification

The 3 months correlation between Allegheny and FLOW is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and FLOW TRADERS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLOW TRADERS LTD 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 FLOW TRADERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLOW TRADERS LTD has no effect on the direction of Allegheny Technologies i.e., Allegheny Technologies and FLOW TRADERS go up and down completely randomly.

Pair Corralation between Allegheny Technologies and FLOW TRADERS

Assuming the 90 days trading horizon Allegheny Technologies Incorporated is expected to generate 1.28 times more return on investment than FLOW TRADERS. However, Allegheny Technologies is 1.28 times more volatile than FLOW TRADERS LTD. It trades about 0.19 of its potential returns per unit of risk. FLOW TRADERS LTD is currently generating about 0.05 per unit of risk. If you would invest  4,646  in Allegheny Technologies Incorporated on March 31, 2025 and sell it today you would earn a total of  2,720  from holding Allegheny Technologies Incorporated or generate 58.54% return on investment over 90 days.

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

Allegheny Technologies Incorpo  vs.  FLOW TRADERS LTD

Allegheny Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allegheny Technologies Incorporated are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Allegheny Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

FLOW TRADERS LTD

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FLOW TRADERS LTD are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FLOW TRADERS may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with Allegheny Technologies and FLOW TRADERS

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

The idea behind Allegheny Technologies Incorporated and FLOW TRADERS LTD 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.