Correlation Between NEW MILLENNIUM and ANGANG STEEL
Can any of the company-specific risk be diversified away by investing in both NEW MILLENNIUM and ANGANG STEEL 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 NEW MILLENNIUM and ANGANG STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEW MILLENNIUM IRON and ANGANG STEEL H , you can compare the effects of market volatilities on NEW MILLENNIUM and ANGANG STEEL 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 NEW MILLENNIUM with a short position of ANGANG STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEW MILLENNIUM and ANGANG STEEL.
Diversification Opportunities for NEW MILLENNIUM and ANGANG STEEL
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NEW and ANGANG is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding NEW MILLENNIUM IRON and ANGANG STEEL H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGANG STEEL H and NEW MILLENNIUM 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 NEW MILLENNIUM IRON are associated (or correlated) with ANGANG STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGANG STEEL H has no effect on the direction of NEW MILLENNIUM i.e., NEW MILLENNIUM and ANGANG STEEL go up and down completely randomly.
Pair Corralation between NEW MILLENNIUM and ANGANG STEEL
Assuming the 90 days trading horizon NEW MILLENNIUM IRON is expected to generate 0.62 times more return on investment than ANGANG STEEL. However, NEW MILLENNIUM IRON is 1.61 times less risky than ANGANG STEEL. It trades about 0.04 of its potential returns per unit of risk. ANGANG STEEL H is currently generating about 0.02 per unit of risk. If you would invest 740.00 in NEW MILLENNIUM IRON on October 29, 2024 and sell it today you would earn a total of 10.00 from holding NEW MILLENNIUM IRON or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEW MILLENNIUM IRON vs. ANGANG STEEL H
Performance |
| Timeline |
| NEW MILLENNIUM IRON |
| ANGANG STEEL H |
NEW MILLENNIUM and ANGANG STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEW MILLENNIUM and ANGANG STEEL
The main advantage of trading using opposite NEW MILLENNIUM and ANGANG STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEW MILLENNIUM position performs unexpectedly, ANGANG STEEL 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 ANGANG STEEL will offset losses from the drop in ANGANG STEEL's long position.| NEW MILLENNIUM vs. Nucletron Electronic Aktiengesellschaft | NEW MILLENNIUM vs. PULSION Medical Systems | NEW MILLENNIUM vs. Genertec Universal Medical | NEW MILLENNIUM vs. CREO MEDICAL GRP |
| ANGANG STEEL vs. Wizz Air Holdings | ANGANG STEEL vs. Canadian Utilities Limited | ANGANG STEEL vs. FAIR ISAAC | ANGANG STEEL vs. NORWEGIAN AIR SHUT |
Check out your portfolio center.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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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