Correlation Between ArcelorMittal and Voestalpine
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal and Voestalpine 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 Voestalpine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ArcelorMittal SA and Voestalpine AG PK, you can compare the effects of market volatilities on ArcelorMittal and Voestalpine 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 Voestalpine. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and Voestalpine.
Diversification Opportunities for ArcelorMittal and Voestalpine
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ArcelorMittal and Voestalpine is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA and Voestalpine AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voestalpine AG PK 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 Voestalpine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voestalpine AG PK has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and Voestalpine go up and down completely randomly.
Pair Corralation between ArcelorMittal and Voestalpine
Assuming the 90 days horizon ArcelorMittal SA is expected to generate 0.74 times more return on investment than Voestalpine. However, ArcelorMittal SA is 1.36 times less risky than Voestalpine. It trades about 0.01 of its potential returns per unit of risk. Voestalpine AG PK is currently generating about 0.0 per unit of risk. If you would invest 2,565 in ArcelorMittal SA on September 19, 2024 and sell it today you would lose (26.00) from holding ArcelorMittal SA or give up 1.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 67.34% |
| Values | Daily Returns |
ArcelorMittal SA vs. Voestalpine AG PK
Performance |
| Timeline |
| ArcelorMittal SA |
| Voestalpine AG PK |
ArcelorMittal and Voestalpine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcelorMittal and Voestalpine
The main advantage of trading using opposite ArcelorMittal and Voestalpine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal position performs unexpectedly, Voestalpine 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 Voestalpine will offset losses from the drop in Voestalpine's long position.| ArcelorMittal vs. ArcelorMittal SA ADR | ArcelorMittal vs. Gerdau SA ADR | ArcelorMittal vs. POSCO Holdings | ArcelorMittal vs. HUMANA INC |
| Voestalpine vs. ArcelorMittal SA ADR | Voestalpine vs. Gerdau SA ADR | Voestalpine vs. POSCO Holdings | Voestalpine vs. HUMANA INC |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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