Correlation Between Algoma Steel and China Tontine
Can any of the company-specific risk be diversified away by investing in both Algoma Steel and China Tontine 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 China Tontine 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 China Tontine Wines, you can compare the effects of market volatilities on Algoma Steel and China Tontine 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 China Tontine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algoma Steel and China Tontine.
Diversification Opportunities for Algoma Steel and China Tontine
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Algoma and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Algoma Steel Group and China Tontine Wines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Tontine Wines 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 China Tontine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Tontine Wines has no effect on the direction of Algoma Steel i.e., Algoma Steel and China Tontine go up and down completely randomly.
Pair Corralation between Algoma Steel and China Tontine
If you would invest 733.00 in Algoma Steel Group on September 3, 2024 and sell it today you would earn a total of 344.00 from holding Algoma Steel Group or generate 46.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Algoma Steel Group vs. China Tontine Wines
Performance |
| Timeline |
| Algoma Steel Group |
| China Tontine Wines |
Algoma Steel and China Tontine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algoma Steel and China Tontine
The main advantage of trading using opposite Algoma Steel and China Tontine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algoma Steel position performs unexpectedly, China Tontine 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 China Tontine will offset losses from the drop in China Tontine's long position.| Algoma Steel vs. Friedman Industries | Algoma Steel vs. ArcelorMittal SA | Algoma Steel vs. Aperam PK | Algoma Steel vs. Acerinox SA ADR |
| China Tontine vs. Diageo PLC ADR | China Tontine vs. Constellation Brands Class | China Tontine vs. Brown Forman | China Tontine vs. Thai Beverage PCL |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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