Correlation Between ALGOMA STEEL and Ping An
Can any of the company-specific risk be diversified away by investing in both ALGOMA STEEL and Ping An 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 Ping An 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 Ping An Insurance, you can compare the effects of market volatilities on ALGOMA STEEL and Ping An 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 Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALGOMA STEEL and Ping An.
Diversification Opportunities for ALGOMA STEEL and Ping An
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between ALGOMA and Ping is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding ALGOMA STEEL GROUP and Ping An Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ping An Insurance 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 Ping An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ping An Insurance has no effect on the direction of ALGOMA STEEL i.e., ALGOMA STEEL and Ping An go up and down completely randomly.
Pair Corralation between ALGOMA STEEL and Ping An
Assuming the 90 days horizon ALGOMA STEEL GROUP is expected to under-perform the Ping An. But the stock apears to be less risky and, when comparing its historical volatility, ALGOMA STEEL GROUP is 1.49 times less risky than Ping An. The stock trades about -0.3 of its potential returns per unit of risk. The Ping An Insurance is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 550.00 in Ping An Insurance on September 13, 2024 and sell it today you would earn a total of 21.00 from holding Ping An Insurance or generate 3.82% 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. Ping An Insurance
Performance |
| Timeline |
| ALGOMA STEEL GROUP |
| Ping An Insurance |
ALGOMA STEEL and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALGOMA STEEL and Ping An
The main advantage of trading using opposite ALGOMA STEEL and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALGOMA STEEL position performs unexpectedly, Ping An 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 Ping An will offset losses from the drop in Ping An'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 |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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