Correlation Between Acme United and Mechel OAO
Can any of the company-specific risk be diversified away by investing in both Acme United and Mechel OAO 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 Acme United and Mechel OAO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acme United and Mechel OAO, you can compare the effects of market volatilities on Acme United and Mechel OAO 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 Acme United with a short position of Mechel OAO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acme United and Mechel OAO.
Diversification Opportunities for Acme United and Mechel OAO
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Acme and Mechel is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Acme United and Mechel OAO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mechel OAO and Acme United 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 Acme United are associated (or correlated) with Mechel OAO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mechel OAO has no effect on the direction of Acme United i.e., Acme United and Mechel OAO go up and down completely randomly.
Pair Corralation between Acme United and Mechel OAO
If you would invest 4,251 in Acme United on September 15, 2024 and sell it today you would earn a total of 78.00 from holding Acme United or generate 1.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Acme United vs. Mechel OAO
Performance |
| Timeline |
| Acme United |
| Mechel OAO |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Acme United and Mechel OAO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acme United and Mechel OAO
The main advantage of trading using opposite Acme United and Mechel OAO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acme United position performs unexpectedly, Mechel OAO 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 Mechel OAO will offset losses from the drop in Mechel OAO's long position.| Acme United vs. Mannatech Incorporated | Acme United vs. European Wax Center | Acme United vs. Inter Parfums | Acme United vs. Spectrum Brands Holdings |
| Mechel OAO vs. Acme United | Mechel OAO vs. Skechers USA | Mechel OAO vs. Rocky Brands | Mechel OAO vs. Mannatech Incorporated |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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