Correlation Between Algoma Steel and Primaris Retail
Can any of the company-specific risk be diversified away by investing in both Algoma Steel and Primaris Retail 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 Algoma Steel and Primaris Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Algoma Steel Group and Primaris Retail RE, you can compare the effects of market volatilities on Algoma Steel and Primaris Retail 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 Algoma Steel with a short position of Primaris Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algoma Steel and Primaris Retail.
Diversification Opportunities for Algoma Steel and Primaris Retail
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Algoma and Primaris is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Algoma Steel Group and Primaris Retail RE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primaris Retail RE and Algoma Steel 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 Algoma Steel Group are associated (or correlated) with Primaris Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primaris Retail RE has no effect on the direction of Algoma Steel i.e., Algoma Steel and Primaris Retail go up and down completely randomly.
Pair Corralation between Algoma Steel and Primaris Retail
Assuming the 90 days trading horizon Algoma Steel Group is expected to generate 1.98 times more return on investment than Primaris Retail. However, Algoma Steel is 1.98 times more volatile than Primaris Retail RE. It trades about 0.08 of its potential returns per unit of risk. Primaris Retail RE is currently generating about 0.08 per unit of risk. If you would invest 976.00 in Algoma Steel Group on September 1, 2024 and sell it today you would earn a total of 526.00 from holding Algoma Steel Group or generate 53.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algoma Steel Group vs. Primaris Retail RE
Performance |
| Timeline |
| Algoma Steel Group |
| Primaris Retail RE |
Algoma Steel and Primaris Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algoma Steel and Primaris Retail
The main advantage of trading using opposite Algoma Steel and Primaris Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algoma Steel position performs unexpectedly, Primaris Retail 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 Primaris Retail will offset losses from the drop in Primaris Retail's long position.| Algoma Steel vs. First Majestic Silver | Algoma Steel vs. Ivanhoe Energy | Algoma Steel vs. Orezone Gold Corp | Algoma Steel vs. Faraday Copper Corp |
| Primaris Retail vs. Slate Office REIT | Primaris Retail vs. Automotive Properties Real | Primaris Retail vs. BTB Real Estate | Primaris Retail vs. CT Real Estate |
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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