Correlation Between Algoma Steel and Slam Exploration
Can any of the company-specific risk be diversified away by investing in both Algoma Steel and Slam Exploration 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 Slam Exploration 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 Slam Exploration, you can compare the effects of market volatilities on Algoma Steel and Slam Exploration 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 Slam Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algoma Steel and Slam Exploration.
Diversification Opportunities for Algoma Steel and Slam Exploration
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Algoma and Slam is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Algoma Steel Group and Slam Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Slam Exploration 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 Slam Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Slam Exploration has no effect on the direction of Algoma Steel i.e., Algoma Steel and Slam Exploration go up and down completely randomly.
Pair Corralation between Algoma Steel and Slam Exploration
Given the investment horizon of 90 days Algoma Steel Group is expected to generate 0.15 times more return on investment than Slam Exploration. However, Algoma Steel Group is 6.67 times less risky than Slam Exploration. It trades about -0.21 of its potential returns per unit of risk. Slam Exploration is currently generating about -0.05 per unit of risk. If you would invest 816.00 in Algoma Steel Group on December 2, 2024 and sell it today you would lose (82.00) from holding Algoma Steel Group or give up 10.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algoma Steel Group vs. Slam Exploration
Performance |
| Timeline |
| Algoma Steel Group |
| Slam Exploration |
Algoma Steel and Slam Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algoma Steel and Slam Exploration
The main advantage of trading using opposite Algoma Steel and Slam Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algoma Steel position performs unexpectedly, Slam Exploration 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 Slam Exploration will offset losses from the drop in Slam Exploration's long position.| Algoma Steel vs. Friedman Industries | Algoma Steel vs. ArcelorMittal SA | Algoma Steel vs. Aperam PK | Algoma Steel vs. Acerinox SA ADR |
| Slam Exploration vs. Stampede Drilling | Slam Exploration vs. Rogers Communications | Slam Exploration vs. Verizon Communications CDR | Slam Exploration vs. Quipt Home Medical |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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