Correlation Between Algoma Steel and Sanyo Special
Can any of the company-specific risk be diversified away by investing in both Algoma Steel and Sanyo Special 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 Sanyo Special 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 Sanyo Special Steel, you can compare the effects of market volatilities on Algoma Steel and Sanyo Special 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 Sanyo Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algoma Steel and Sanyo Special.
Diversification Opportunities for Algoma Steel and Sanyo Special
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Algoma and Sanyo is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Algoma Steel Group and Sanyo Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanyo Special Steel 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 Sanyo Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanyo Special Steel has no effect on the direction of Algoma Steel i.e., Algoma Steel and Sanyo Special go up and down completely randomly.
Pair Corralation between Algoma Steel and Sanyo Special
Given the investment horizon of 90 days Algoma Steel Group is expected to generate 3.24 times more return on investment than Sanyo Special. However, Algoma Steel is 3.24 times more volatile than Sanyo Special Steel. It trades about 0.02 of its potential returns per unit of risk. Sanyo Special Steel is currently generating about -0.03 per unit of risk. If you would invest 768.00 in Algoma Steel Group on November 19, 2024 and sell it today you would earn a total of 31.00 from holding Algoma Steel Group or generate 4.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Algoma Steel Group vs. Sanyo Special Steel
Performance |
| Timeline |
| Algoma Steel Group |
| Sanyo Special Steel |
Algoma Steel and Sanyo Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algoma Steel and Sanyo Special
The main advantage of trading using opposite Algoma Steel and Sanyo Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algoma Steel position performs unexpectedly, Sanyo Special 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 Sanyo Special will offset losses from the drop in Sanyo Special's long position.| Algoma Steel vs. Friedman Industries | Algoma Steel vs. ArcelorMittal SA | Algoma Steel vs. Aperam PK | Algoma Steel vs. Acerinox SA ADR |
| Sanyo Special vs. Legacy Education | Sanyo Special vs. Apple Inc | Sanyo Special vs. NVIDIA | Sanyo Special vs. Microsoft |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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