Correlation Between ArcelorMittal and Klckner Co
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal and Klckner Co 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 Klckner Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ArcelorMittal and Klckner Co SE, you can compare the effects of market volatilities on ArcelorMittal and Klckner Co 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 Klckner Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and Klckner Co.
Diversification Opportunities for ArcelorMittal and Klckner Co
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ArcelorMittal and Klckner is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal and Klckner Co SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klckner Co SE 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 are associated (or correlated) with Klckner Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klckner Co SE has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and Klckner Co go up and down completely randomly.
Pair Corralation between ArcelorMittal and Klckner Co
Assuming the 90 days trading horizon ArcelorMittal is expected to generate 1.15 times more return on investment than Klckner Co. However, ArcelorMittal is 1.15 times more volatile than Klckner Co SE. It trades about 0.2 of its potential returns per unit of risk. Klckner Co SE is currently generating about 0.03 per unit of risk. If you would invest 2,178 in ArcelorMittal on August 24, 2024 and sell it today you would earn a total of 222.00 from holding ArcelorMittal or generate 10.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ArcelorMittal vs. Klckner Co SE
Performance |
| Timeline |
| ArcelorMittal |
| Klckner Co SE |
ArcelorMittal and Klckner Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcelorMittal and Klckner Co
The main advantage of trading using opposite ArcelorMittal and Klckner Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal position performs unexpectedly, Klckner Co 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 Klckner Co will offset losses from the drop in Klckner Co's long position.| ArcelorMittal vs. ELECTRONIC ARTS | ArcelorMittal vs. AOI Electronics Co | ArcelorMittal vs. PKSHA TECHNOLOGY INC | ArcelorMittal vs. Methode Electronics |
| Klckner Co vs. Grand Canyon Education | Klckner Co vs. AIR PRODCHEMICALS | Klckner Co vs. MINCO SILVER | Klckner Co vs. Evolution Mining Limited |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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