Correlation Between ALGOMA STEEL and Khiron Life
Can any of the company-specific risk be diversified away by investing in both ALGOMA STEEL and Khiron Life 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 Khiron Life 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 Khiron Life Sciences, you can compare the effects of market volatilities on ALGOMA STEEL and Khiron Life 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 Khiron Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALGOMA STEEL and Khiron Life.
Diversification Opportunities for ALGOMA STEEL and Khiron Life
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ALGOMA and Khiron is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ALGOMA STEEL GROUP and Khiron Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Khiron Life Sciences 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 Khiron Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Khiron Life Sciences has no effect on the direction of ALGOMA STEEL i.e., ALGOMA STEEL and Khiron Life go up and down completely randomly.
Pair Corralation between ALGOMA STEEL and Khiron Life
Assuming the 90 days horizon ALGOMA STEEL GROUP is expected to generate 0.52 times more return on investment than Khiron Life. However, ALGOMA STEEL GROUP is 1.94 times less risky than Khiron Life. It trades about 0.06 of its potential returns per unit of risk. Khiron Life Sciences is currently generating about 0.01 per unit of risk. If you would invest 545.00 in ALGOMA STEEL GROUP on September 2, 2024 and sell it today you would earn a total of 455.00 from holding ALGOMA STEEL GROUP or generate 83.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
ALGOMA STEEL GROUP vs. Khiron Life Sciences
Performance |
| Timeline |
| ALGOMA STEEL GROUP |
| Khiron Life Sciences |
ALGOMA STEEL and Khiron Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALGOMA STEEL and Khiron Life
The main advantage of trading using opposite ALGOMA STEEL and Khiron Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALGOMA STEEL position performs unexpectedly, Khiron Life 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 Khiron Life will offset losses from the drop in Khiron Life's long position.The idea behind ALGOMA STEEL GROUP and Khiron Life Sciences 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.| Khiron Life vs. Apple Inc | Khiron Life vs. Apple Inc | Khiron Life vs. Apple Inc | Khiron Life vs. Apple Inc |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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