Correlation Between ALGOMA STEEL and WAGNERS HOLDING
Can any of the company-specific risk be diversified away by investing in both ALGOMA STEEL and WAGNERS HOLDING 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 ALGOMA STEEL and WAGNERS HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALGOMA STEEL GROUP and WAGNERS HOLDING LTD, you can compare the effects of market volatilities on ALGOMA STEEL and WAGNERS HOLDING 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 ALGOMA STEEL with a short position of WAGNERS HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALGOMA STEEL and WAGNERS HOLDING.
Diversification Opportunities for ALGOMA STEEL and WAGNERS HOLDING
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between ALGOMA and WAGNERS is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding ALGOMA STEEL GROUP and WAGNERS HOLDING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WAGNERS HOLDING LTD and ALGOMA STEEL 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 ALGOMA STEEL GROUP are associated (or correlated) with WAGNERS HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WAGNERS HOLDING LTD has no effect on the direction of ALGOMA STEEL i.e., ALGOMA STEEL and WAGNERS HOLDING go up and down completely randomly.
Pair Corralation between ALGOMA STEEL and WAGNERS HOLDING
Assuming the 90 days horizon ALGOMA STEEL is expected to generate 4.25 times less return on investment than WAGNERS HOLDING. But when comparing it to its historical volatility, ALGOMA STEEL GROUP is 1.62 times less risky than WAGNERS HOLDING. It trades about 0.02 of its potential returns per unit of risk. WAGNERS HOLDING LTD is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 41.00 in WAGNERS HOLDING LTD on October 30, 2024 and sell it today you would earn a total of 49.00 from holding WAGNERS HOLDING LTD or generate 119.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
ALGOMA STEEL GROUP vs. WAGNERS HOLDING LTD
Performance |
| Timeline |
| ALGOMA STEEL GROUP |
| WAGNERS HOLDING LTD |
ALGOMA STEEL and WAGNERS HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALGOMA STEEL and WAGNERS HOLDING
The main advantage of trading using opposite ALGOMA STEEL and WAGNERS HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALGOMA STEEL position performs unexpectedly, WAGNERS HOLDING 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 WAGNERS HOLDING will offset losses from the drop in WAGNERS HOLDING's long position.| ALGOMA STEEL vs. PLAYTECH | ALGOMA STEEL vs. STMICROELECTRONICS | ALGOMA STEEL vs. Richardson Electronics | ALGOMA STEEL vs. PLAY2CHILL SA ZY |
| WAGNERS HOLDING vs. Neinor Homes SA | WAGNERS HOLDING vs. CENTURIA OFFICE REIT | WAGNERS HOLDING vs. Focus Home Interactive | WAGNERS HOLDING vs. Haier Smart Home |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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