Correlation Between ALGOMA STEEL and PLAYTIKA HOLDING
Can any of the company-specific risk be diversified away by investing in both ALGOMA STEEL and PLAYTIKA 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 PLAYTIKA 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 PLAYTIKA HOLDING DL 01, you can compare the effects of market volatilities on ALGOMA STEEL and PLAYTIKA 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 PLAYTIKA HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALGOMA STEEL and PLAYTIKA HOLDING.
Diversification Opportunities for ALGOMA STEEL and PLAYTIKA HOLDING
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ALGOMA and PLAYTIKA is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding ALGOMA STEEL GROUP and PLAYTIKA HOLDING DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYTIKA HOLDING 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 PLAYTIKA HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYTIKA HOLDING has no effect on the direction of ALGOMA STEEL i.e., ALGOMA STEEL and PLAYTIKA HOLDING go up and down completely randomly.
Pair Corralation between ALGOMA STEEL and PLAYTIKA HOLDING
Assuming the 90 days horizon ALGOMA STEEL GROUP is expected to generate 0.97 times more return on investment than PLAYTIKA HOLDING. However, ALGOMA STEEL GROUP is 1.03 times less risky than PLAYTIKA HOLDING. It trades about 0.06 of its potential returns per unit of risk. PLAYTIKA HOLDING DL 01 is currently generating about 0.02 per unit of risk. If you would invest 683.00 in ALGOMA STEEL GROUP on September 14, 2024 and sell it today you would earn a total of 272.00 from holding ALGOMA STEEL GROUP or generate 39.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALGOMA STEEL GROUP vs. PLAYTIKA HOLDING DL 01
Performance |
| Timeline |
| ALGOMA STEEL GROUP |
| PLAYTIKA HOLDING |
ALGOMA STEEL and PLAYTIKA HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALGOMA STEEL and PLAYTIKA HOLDING
The main advantage of trading using opposite ALGOMA STEEL and PLAYTIKA HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALGOMA STEEL position performs unexpectedly, PLAYTIKA 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 PLAYTIKA HOLDING will offset losses from the drop in PLAYTIKA HOLDING's long position.| ALGOMA STEEL vs. ArcelorMittal | ALGOMA STEEL vs. NIPPON STEEL SPADR | ALGOMA STEEL vs. Reliance Steel Aluminum | ALGOMA STEEL vs. Superior Plus Corp |
| PLAYTIKA HOLDING vs. Salesforce | PLAYTIKA HOLDING vs. SIMS METAL MGT | PLAYTIKA HOLDING vs. FIREWEED METALS P | PLAYTIKA HOLDING vs. Lion One Metals |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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