Correlation Between ALGOMA STEEL and EON SE
Can any of the company-specific risk be diversified away by investing in both ALGOMA STEEL and EON SE 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 EON SE 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 EON SE, you can compare the effects of market volatilities on ALGOMA STEEL and EON SE 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 EON SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALGOMA STEEL and EON SE.
Diversification Opportunities for ALGOMA STEEL and EON SE
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ALGOMA and EON is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding ALGOMA STEEL GROUP and EON SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EON SE 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 EON SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EON SE has no effect on the direction of ALGOMA STEEL i.e., ALGOMA STEEL and EON SE go up and down completely randomly.
Pair Corralation between ALGOMA STEEL and EON SE
Assuming the 90 days horizon ALGOMA STEEL GROUP is expected to under-perform the EON SE. In addition to that, ALGOMA STEEL is 1.85 times more volatile than EON SE. It trades about -0.43 of its total potential returns per unit of risk. EON SE is currently generating about 0.36 per unit of volatility. If you would invest 1,143 in EON SE on December 4, 2024 and sell it today you would earn a total of 82.00 from holding EON SE or generate 7.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALGOMA STEEL GROUP vs. EON SE
Performance |
| Timeline |
| ALGOMA STEEL GROUP |
| EON SE |
ALGOMA STEEL and EON SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALGOMA STEEL and EON SE
The main advantage of trading using opposite ALGOMA STEEL and EON SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALGOMA STEEL position performs unexpectedly, EON SE 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 EON SE will offset losses from the drop in EON SE's long position.| ALGOMA STEEL vs. SLR Investment Corp | ALGOMA STEEL vs. Japan Asia Investment | ALGOMA STEEL vs. GUILD ESPORTS PLC | ALGOMA STEEL vs. Diversified Healthcare Trust |
| EON SE vs. Zurich Insurance Group | EON SE vs. Federal Agricultural Mortgage | EON SE vs. REVO INSURANCE SPA | EON SE vs. FARM 51 GROUP |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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