Correlation Between ArcelorMittal and TMST Old
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal and TMST Old 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 ArcelorMittal and TMST Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ArcelorMittal SA and TMST Old, you can compare the effects of market volatilities on ArcelorMittal and TMST Old 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 ArcelorMittal with a short position of TMST Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and TMST Old.
Diversification Opportunities for ArcelorMittal and TMST Old
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ArcelorMittal and TMST is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA and TMST Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMST Old and ArcelorMittal 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 ArcelorMittal SA are associated (or correlated) with TMST Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMST Old has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and TMST Old go up and down completely randomly.
Pair Corralation between ArcelorMittal and TMST Old
If you would invest 2,260 in ArcelorMittal SA on August 24, 2024 and sell it today you would earn a total of 250.00 from holding ArcelorMittal SA or generate 11.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 6.67% |
| Values | Daily Returns |
ArcelorMittal SA vs. TMST Old
Performance |
| Timeline |
| ArcelorMittal SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| TMST Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ArcelorMittal and TMST Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcelorMittal and TMST Old
The main advantage of trading using opposite ArcelorMittal and TMST Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal position performs unexpectedly, TMST Old 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 TMST Old will offset losses from the drop in TMST Old's long position.| ArcelorMittal vs. ArcelorMittal SA ADR | ArcelorMittal vs. Gerdau SA ADR | ArcelorMittal vs. POSCO Holdings | ArcelorMittal vs. HUMANA INC |
| TMST Old vs. Reliance Steel Aluminum | TMST Old vs. Universal Stainless Alloy | TMST Old vs. Outokumpu Oyj ADR | TMST Old vs. Olympic Steel |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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