Correlation Between Allegheny Technologies and DT Cloud

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

Diversification Opportunities for Allegheny Technologies and DT Cloud

0.29

Correlation Coefficient

Allegheny Technologies  DT Cloud

Modest diversification

The 3 months correlation between Allegheny and DYCQ is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and DT Cloud Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DT Cloud Acquisition 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 DT Cloud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DT Cloud Acquisition has no effect on the direction of Allegheny Technologies i.e., Allegheny Technologies and DT Cloud go up and down completely randomly.

Pair Corralation between Allegheny Technologies and DT Cloud

Considering the 90-day investment horizon Allegheny Technologies Incorporated is expected to generate 17.31 times more return on investment than DT Cloud. However, Allegheny Technologies is 17.31 times more volatile than DT Cloud Acquisition. It trades about 0.15 of its potential returns per unit of risk. DT Cloud Acquisition is currently generating about 0.09 per unit of risk. If you would invest  5,673  in Allegheny Technologies Incorporated on February 26, 2025 and sell it today you would earn a total of  2,275  from holding Allegheny Technologies Incorporated or generate 40.1% return on investment over 90 days.

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

Allegheny Technologies Incorpo  vs.  DT Cloud Acquisition

Allegheny Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Allegheny Technologies Incorporated are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Allegheny Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

DT Cloud Acquisition

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DT Cloud Acquisition are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, DT Cloud is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Allegheny Technologies and DT Cloud

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

The idea behind Allegheny Technologies Incorporated and DT Cloud Acquisition 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.