Correlation Between Algoma Steel and Integral
Can any of the company-specific risk be diversified away by investing in both Algoma Steel and Integral 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 Integral 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 Integral Ad Science, you can compare the effects of market volatilities on Algoma Steel and Integral 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 Integral. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algoma Steel and Integral.
Diversification Opportunities for Algoma Steel and Integral
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Algoma and Integral is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Algoma Steel Group and Integral Ad Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integral Ad Science 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 Integral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integral Ad Science has no effect on the direction of Algoma Steel i.e., Algoma Steel and Integral go up and down completely randomly.
Pair Corralation between Algoma Steel and Integral
Given the investment horizon of 90 days Algoma Steel Group is expected to generate 0.7 times more return on investment than Integral. However, Algoma Steel Group is 1.43 times less risky than Integral. It trades about 0.06 of its potential returns per unit of risk. Integral Ad Science is currently generating about 0.03 per unit of risk. If you would invest 573.00 in Algoma Steel Group on September 3, 2024 and sell it today you would earn a total of 504.00 from holding Algoma Steel Group or generate 87.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algoma Steel Group vs. Integral Ad Science
Performance |
| Timeline |
| Algoma Steel Group |
| Integral Ad Science |
Algoma Steel and Integral Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algoma Steel and Integral
The main advantage of trading using opposite Algoma Steel and Integral positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algoma Steel position performs unexpectedly, Integral 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 Integral will offset losses from the drop in Integral's long position.| Algoma Steel vs. Friedman Industries | Algoma Steel vs. ArcelorMittal SA | Algoma Steel vs. Aperam PK | Algoma Steel vs. Acerinox SA ADR |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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