Correlation Between ALGOMA STEEL and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both ALGOMA STEEL and Jacquet Metal 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 Jacquet Metal 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 Jacquet Metal Service, you can compare the effects of market volatilities on ALGOMA STEEL and Jacquet Metal 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 Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALGOMA STEEL and Jacquet Metal.
Diversification Opportunities for ALGOMA STEEL and Jacquet Metal
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between ALGOMA and Jacquet is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding ALGOMA STEEL GROUP and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service 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 Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of ALGOMA STEEL i.e., ALGOMA STEEL and Jacquet Metal go up and down completely randomly.
Pair Corralation between ALGOMA STEEL and Jacquet Metal
Assuming the 90 days horizon ALGOMA STEEL GROUP is expected to generate 2.16 times more return on investment than Jacquet Metal. However, ALGOMA STEEL is 2.16 times more volatile than Jacquet Metal Service. It trades about 0.07 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about -0.1 per unit of risk. If you would invest 965.00 in ALGOMA STEEL GROUP on September 1, 2024 and sell it today you would earn a total of 35.00 from holding ALGOMA STEEL GROUP or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALGOMA STEEL GROUP vs. Jacquet Metal Service
Performance |
| Timeline |
| ALGOMA STEEL GROUP |
| Jacquet Metal Service |
ALGOMA STEEL and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALGOMA STEEL and Jacquet Metal
The main advantage of trading using opposite ALGOMA STEEL and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALGOMA STEEL position performs unexpectedly, Jacquet Metal 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 Jacquet Metal will offset losses from the drop in Jacquet Metal's long position.| ALGOMA STEEL vs. ScanSource | ALGOMA STEEL vs. Tower Semiconductor | ALGOMA STEEL vs. LION ONE METALS | ALGOMA STEEL vs. PRECISION DRILLING P |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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