Correlation Between AOYAMA TRADING and ALGOMA STEEL
Can any of the company-specific risk be diversified away by investing in both AOYAMA TRADING and ALGOMA 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 AOYAMA TRADING and ALGOMA STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AOYAMA TRADING and ALGOMA STEEL GROUP, you can compare the effects of market volatilities on AOYAMA TRADING and ALGOMA 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 AOYAMA TRADING with a short position of ALGOMA STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOYAMA TRADING and ALGOMA STEEL.
Diversification Opportunities for AOYAMA TRADING and ALGOMA STEEL
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AOYAMA and ALGOMA is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding AOYAMA TRADING and ALGOMA STEEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALGOMA STEEL GROUP and AOYAMA TRADING 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 AOYAMA TRADING are associated (or correlated) with ALGOMA STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALGOMA STEEL GROUP has no effect on the direction of AOYAMA TRADING i.e., AOYAMA TRADING and ALGOMA STEEL go up and down completely randomly.
Pair Corralation between AOYAMA TRADING and ALGOMA STEEL
Assuming the 90 days horizon AOYAMA TRADING is expected to generate 1.46 times more return on investment than ALGOMA STEEL. However, AOYAMA TRADING is 1.46 times more volatile than ALGOMA STEEL GROUP. It trades about 0.13 of its potential returns per unit of risk. ALGOMA STEEL GROUP is currently generating about 0.01 per unit of risk. If you would invest 820.00 in AOYAMA TRADING on November 4, 2024 and sell it today you would earn a total of 540.00 from holding AOYAMA TRADING or generate 65.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AOYAMA TRADING vs. ALGOMA STEEL GROUP
Performance |
| Timeline |
| AOYAMA TRADING |
| ALGOMA STEEL GROUP |
AOYAMA TRADING and ALGOMA STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOYAMA TRADING and ALGOMA STEEL
The main advantage of trading using opposite AOYAMA TRADING and ALGOMA STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOYAMA TRADING position performs unexpectedly, ALGOMA 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 ALGOMA STEEL will offset losses from the drop in ALGOMA STEEL's long position.| AOYAMA TRADING vs. Iridium Communications | AOYAMA TRADING vs. Geely Automobile Holdings | AOYAMA TRADING vs. Ribbon Communications | AOYAMA TRADING vs. Cogent Communications Holdings |
| ALGOMA STEEL vs. ArcelorMittal SA | ALGOMA STEEL vs. Steel Dynamics | ALGOMA STEEL vs. Nippon Steel | ALGOMA STEEL vs. NIPPON STEEL SPADR |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |