Correlation Between Algoma Steel and Arizona Gold
Can any of the company-specific risk be diversified away by investing in both Algoma Steel and Arizona Gold 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 Arizona Gold 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 Arizona Gold Silver, you can compare the effects of market volatilities on Algoma Steel and Arizona Gold 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 Arizona Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algoma Steel and Arizona Gold.
Diversification Opportunities for Algoma Steel and Arizona Gold
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Algoma and Arizona is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Algoma Steel Group and Arizona Gold Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arizona Gold Silver 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 Arizona Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arizona Gold Silver has no effect on the direction of Algoma Steel i.e., Algoma Steel and Arizona Gold go up and down completely randomly.
Pair Corralation between Algoma Steel and Arizona Gold
Given the investment horizon of 90 days Algoma Steel Group is expected to generate 0.91 times more return on investment than Arizona Gold. However, Algoma Steel Group is 1.1 times less risky than Arizona Gold. It trades about 0.04 of its potential returns per unit of risk. Arizona Gold Silver is currently generating about -0.08 per unit of risk. If you would invest 1,037 in Algoma Steel Group on September 4, 2024 and sell it today you would earn a total of 19.00 from holding Algoma Steel Group or generate 1.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Algoma Steel Group vs. Arizona Gold Silver
Performance |
| Timeline |
| Algoma Steel Group |
| Arizona Gold Silver |
Algoma Steel and Arizona Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algoma Steel and Arizona Gold
The main advantage of trading using opposite Algoma Steel and Arizona Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algoma Steel position performs unexpectedly, Arizona Gold 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 Arizona Gold will offset losses from the drop in Arizona Gold's long position.| Algoma Steel vs. Friedman Industries | Algoma Steel vs. Algoma Steel Group | Algoma Steel vs. Reliance Steel Aluminum | Algoma Steel vs. Universal Stainless Alloy |
| Arizona Gold vs. Dolly Varden Silver | Arizona Gold vs. Reyna Silver Corp | Arizona Gold vs. Aztec Minerals Corp | Arizona Gold vs. Aftermath Silver |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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