Correlation Between ArcelorMittal and SPORT LISBOA
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal and SPORT LISBOA 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 SPORT LISBOA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ArcelorMittal SA and SPORT LISBOA E, you can compare the effects of market volatilities on ArcelorMittal and SPORT LISBOA 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 SPORT LISBOA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and SPORT LISBOA.
Diversification Opportunities for ArcelorMittal and SPORT LISBOA
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between ArcelorMittal and SPORT is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA and SPORT LISBOA E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPORT LISBOA E 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 SPORT LISBOA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPORT LISBOA E has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and SPORT LISBOA go up and down completely randomly.
Pair Corralation between ArcelorMittal and SPORT LISBOA
Assuming the 90 days trading horizon ArcelorMittal SA is expected to under-perform the SPORT LISBOA. But the stock apears to be less risky and, when comparing its historical volatility, ArcelorMittal SA is 1.43 times less risky than SPORT LISBOA. The stock trades about 0.0 of its potential returns per unit of risk. The SPORT LISBOA E is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 292.00 in SPORT LISBOA E on September 12, 2024 and sell it today you would earn a total of 29.00 from holding SPORT LISBOA E or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ArcelorMittal SA vs. SPORT LISBOA E
Performance |
| Timeline |
| ArcelorMittal SA |
| SPORT LISBOA E |
ArcelorMittal and SPORT LISBOA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcelorMittal and SPORT LISBOA
The main advantage of trading using opposite ArcelorMittal and SPORT LISBOA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal position performs unexpectedly, SPORT LISBOA 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 SPORT LISBOA will offset losses from the drop in SPORT LISBOA's long position.| ArcelorMittal vs. ArcelorMittal | ArcelorMittal vs. NIPPON STEEL SPADR | ArcelorMittal vs. Reliance Steel Aluminum | ArcelorMittal vs. Superior Plus Corp |
| SPORT LISBOA vs. The Walt Disney | SPORT LISBOA vs. Charter Communications | SPORT LISBOA vs. Warner Music Group | SPORT LISBOA 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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