Correlation Between Algoma Steel and ACG Metals
Can any of the company-specific risk be diversified away by investing in both Algoma Steel and ACG Metals 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 ACG Metals 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 ACG Metals Limited, you can compare the effects of market volatilities on Algoma Steel and ACG Metals 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 ACG Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algoma Steel and ACG Metals.
Diversification Opportunities for Algoma Steel and ACG Metals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Algoma and ACG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Algoma Steel Group and ACG Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACG Metals Limited 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 ACG Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACG Metals Limited has no effect on the direction of Algoma Steel i.e., Algoma Steel and ACG Metals go up and down completely randomly.
Pair Corralation between Algoma Steel and ACG Metals
If you would invest 1,056 in Algoma Steel Group on August 31, 2024 and sell it today you would earn a total of 21.00 from holding Algoma Steel Group or generate 1.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Algoma Steel Group vs. ACG Metals Limited
Performance |
| Timeline |
| Algoma Steel Group |
| ACG Metals Limited |
Algoma Steel and ACG Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algoma Steel and ACG Metals
The main advantage of trading using opposite Algoma Steel and ACG Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algoma Steel position performs unexpectedly, ACG Metals 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 ACG Metals will offset losses from the drop in ACG Metals' long position.| Algoma Steel vs. Nucor Corp | Algoma Steel vs. Steel Dynamics | Algoma Steel vs. ArcelorMittal SA ADR | Algoma Steel vs. Gerdau SA ADR |
| ACG Metals vs. Legacy Education | ACG Metals vs. Apple Inc | ACG Metals vs. NVIDIA | ACG Metals vs. Microsoft |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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