Correlation Between ZANAGA IRON and United States
Can any of the company-specific risk be diversified away by investing in both ZANAGA IRON and United States 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 ZANAGA IRON and United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZANAGA IRON ORE and United States Steel, you can compare the effects of market volatilities on ZANAGA IRON and United States 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 ZANAGA IRON with a short position of United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZANAGA IRON and United States.
Diversification Opportunities for ZANAGA IRON and United States
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ZANAGA and United is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding ZANAGA IRON ORE and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel and ZANAGA IRON 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 ZANAGA IRON ORE are associated (or correlated) with United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of ZANAGA IRON i.e., ZANAGA IRON and United States go up and down completely randomly.
Pair Corralation between ZANAGA IRON and United States
Assuming the 90 days trading horizon ZANAGA IRON is expected to generate 2.22 times less return on investment than United States. In addition to that, ZANAGA IRON is 2.95 times more volatile than United States Steel. It trades about 0.01 of its total potential returns per unit of risk. United States Steel is currently generating about 0.07 per unit of volatility. If you would invest 2,091 in United States Steel on August 31, 2024 and sell it today you would earn a total of 1,699 from holding United States Steel or generate 81.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZANAGA IRON ORE vs. United States Steel
Performance |
| Timeline |
| ZANAGA IRON ORE |
| United States Steel |
ZANAGA IRON and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZANAGA IRON and United States
The main advantage of trading using opposite ZANAGA IRON and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZANAGA IRON position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| ZANAGA IRON vs. HOCHSCHILD MINING | ZANAGA IRON vs. CSSC Offshore Marine | ZANAGA IRON vs. Carsales | ZANAGA IRON vs. TSOGO SUN GAMING |
| United States vs. Canadian Utilities Limited | United States vs. Digilife Technologies Limited | United States vs. Eidesvik Offshore ASA | United States vs. BW OFFSHORE LTD |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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