Correlation Between Algoma Steel and Great Atlantic
Can any of the company-specific risk be diversified away by investing in both Algoma Steel and Great Atlantic 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 Great Atlantic 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 Great Atlantic Resources, you can compare the effects of market volatilities on Algoma Steel and Great Atlantic 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 Great Atlantic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algoma Steel and Great Atlantic.
Diversification Opportunities for Algoma Steel and Great Atlantic
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Algoma and Great is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Algoma Steel Group and Great Atlantic Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Atlantic Resources 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 Great Atlantic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Atlantic Resources has no effect on the direction of Algoma Steel i.e., Algoma Steel and Great Atlantic go up and down completely randomly.
Pair Corralation between Algoma Steel and Great Atlantic
Given the investment horizon of 90 days Algoma Steel Group is expected to generate 0.26 times more return on investment than Great Atlantic. However, Algoma Steel Group is 3.9 times less risky than Great Atlantic. It trades about 0.02 of its potential returns per unit of risk. Great Atlantic Resources is currently generating about -0.04 per unit of risk. If you would invest 998.00 in Algoma Steel Group on September 12, 2024 and sell it today you would earn a total of 17.00 from holding Algoma Steel Group or generate 1.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algoma Steel Group vs. Great Atlantic Resources
Performance |
| Timeline |
| Algoma Steel Group |
| Great Atlantic Resources |
Algoma Steel and Great Atlantic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algoma Steel and Great Atlantic
The main advantage of trading using opposite Algoma Steel and Great Atlantic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algoma Steel position performs unexpectedly, Great Atlantic 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 Great Atlantic will offset losses from the drop in Great Atlantic's long position.| Algoma Steel vs. Friedman Industries | Algoma Steel vs. ArcelorMittal SA | Algoma Steel vs. Aperam PK | Algoma Steel vs. Acerinox SA ADR |
| Great Atlantic vs. Ressources Minieres Radisson | Great Atlantic vs. Galantas Gold Corp | Great Atlantic vs. Red Pine Exploration | Great Atlantic vs. Kore Mining |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |