Correlation Between Algoma Steel and LOEWS
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By analyzing existing cross correlation between Algoma Steel Group and LOEWS P 4125, you can compare the effects of market volatilities on Algoma Steel and LOEWS 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 LOEWS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algoma Steel and LOEWS.
Diversification Opportunities for Algoma Steel and LOEWS
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Algoma and LOEWS is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Algoma Steel Group and LOEWS P 4125 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOEWS P 4125 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 LOEWS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOEWS P 4125 has no effect on the direction of Algoma Steel i.e., Algoma Steel and LOEWS go up and down completely randomly.
Pair Corralation between Algoma Steel and LOEWS
Given the investment horizon of 90 days Algoma Steel Group is expected to under-perform the LOEWS. In addition to that, Algoma Steel is 1.78 times more volatile than LOEWS P 4125. It trades about -0.43 of its total potential returns per unit of risk. LOEWS P 4125 is currently generating about -0.07 per unit of volatility. If you would invest 8,289 in LOEWS P 4125 on November 28, 2024 and sell it today you would lose (112.00) from holding LOEWS P 4125 or give up 1.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 66.67% |
| Values | Daily Returns |
Algoma Steel Group vs. LOEWS P 4125
Performance |
| Timeline |
| Algoma Steel Group |
| LOEWS P 4125 |
Algoma Steel and LOEWS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algoma Steel and LOEWS
The main advantage of trading using opposite Algoma Steel and LOEWS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algoma Steel position performs unexpectedly, LOEWS 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 LOEWS will offset losses from the drop in LOEWS's long position.| Algoma Steel vs. Friedman Industries | Algoma Steel vs. ArcelorMittal SA | Algoma Steel vs. Aperam PK | Algoma Steel vs. Acerinox SA ADR |
| LOEWS vs. Catalyst Pharmaceuticals | LOEWS vs. Belden Inc | LOEWS vs. Molecular Partners AG | LOEWS vs. Alto Neuroscience, |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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