Correlation Between Algoma Steel and CIGNA
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By analyzing existing cross correlation between Algoma Steel Group and CIGNA P 325, you can compare the effects of market volatilities on Algoma Steel and CIGNA 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 CIGNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algoma Steel and CIGNA.
Diversification Opportunities for Algoma Steel and CIGNA
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Algoma and CIGNA is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Algoma Steel Group and CIGNA P 325 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIGNA P 325 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 CIGNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIGNA P 325 has no effect on the direction of Algoma Steel i.e., Algoma Steel and CIGNA go up and down completely randomly.
Pair Corralation between Algoma Steel and CIGNA
Given the investment horizon of 90 days Algoma Steel Group is expected to generate 3.95 times more return on investment than CIGNA. However, Algoma Steel is 3.95 times more volatile than CIGNA P 325. It trades about 0.06 of its potential returns per unit of risk. CIGNA P 325 is currently generating about 0.0 per unit of risk. If you would invest 585.00 in Algoma Steel Group on September 12, 2024 and sell it today you would earn a total of 427.00 from holding Algoma Steel Group or generate 72.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 79.39% |
| Values | Daily Returns |
Algoma Steel Group vs. CIGNA P 325
Performance |
| Timeline |
| Algoma Steel Group |
| CIGNA P 325 |
Algoma Steel and CIGNA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algoma Steel and CIGNA
The main advantage of trading using opposite Algoma Steel and CIGNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algoma Steel position performs unexpectedly, CIGNA 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 CIGNA will offset losses from the drop in CIGNA's long position.| Algoma Steel vs. Friedman Industries | Algoma Steel vs. ArcelorMittal SA | Algoma Steel vs. Aperam PK | Algoma Steel vs. Acerinox SA ADR |
| CIGNA vs. Century Aluminum | CIGNA vs. Grupo Simec SAB | CIGNA vs. Summit Environmental | CIGNA vs. Algoma Steel Group |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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