Correlation Between Algoma Steel and Colibri Resource
Can any of the company-specific risk be diversified away by investing in both Algoma Steel and Colibri Resource 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 Colibri Resource 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 Colibri Resource Corp, you can compare the effects of market volatilities on Algoma Steel and Colibri Resource 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 Colibri Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algoma Steel and Colibri Resource.
Diversification Opportunities for Algoma Steel and Colibri Resource
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Algoma and Colibri is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Algoma Steel Group and Colibri Resource Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colibri Resource Corp 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 Colibri Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colibri Resource Corp has no effect on the direction of Algoma Steel i.e., Algoma Steel and Colibri Resource go up and down completely randomly.
Pair Corralation between Algoma Steel and Colibri Resource
Given the investment horizon of 90 days Algoma Steel Group is expected to generate 0.25 times more return on investment than Colibri Resource. However, Algoma Steel Group is 3.98 times less risky than Colibri Resource. It trades about 0.13 of its potential returns per unit of risk. Colibri Resource Corp is currently generating about -0.02 per unit of risk. 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 | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algoma Steel Group vs. Colibri Resource Corp
Performance |
| Timeline |
| Algoma Steel Group |
| Colibri Resource Corp |
Algoma Steel and Colibri Resource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algoma Steel and Colibri Resource
The main advantage of trading using opposite Algoma Steel and Colibri Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algoma Steel position performs unexpectedly, Colibri Resource 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 Colibri Resource will offset losses from the drop in Colibri Resource's long position.| Algoma Steel vs. Friedman Industries | Algoma Steel vs. ArcelorMittal SA | Algoma Steel vs. Aperam PK | Algoma Steel vs. Acerinox SA ADR |
| Colibri Resource vs. Algoma Steel Group | Colibri Resource vs. Champion Iron | Colibri Resource vs. International Zeolite Corp | Colibri Resource vs. European Residential Real |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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