Correlation Between Algoma Steel and Zhibao Technology
Can any of the company-specific risk be diversified away by investing in both Algoma Steel and Zhibao Technology 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 Zhibao Technology 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 Zhibao Technology Class, you can compare the effects of market volatilities on Algoma Steel and Zhibao Technology 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 Zhibao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algoma Steel and Zhibao Technology.
Diversification Opportunities for Algoma Steel and Zhibao Technology
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Algoma and Zhibao is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Algoma Steel Group and Zhibao Technology Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhibao Technology Class 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 Zhibao Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhibao Technology Class has no effect on the direction of Algoma Steel i.e., Algoma Steel and Zhibao Technology go up and down completely randomly.
Pair Corralation between Algoma Steel and Zhibao Technology
Given the investment horizon of 90 days Algoma Steel Group is expected to generate 0.4 times more return on investment than Zhibao Technology. However, Algoma Steel Group is 2.49 times less risky than Zhibao Technology. It trades about 0.04 of its potential returns per unit of risk. Zhibao Technology Class is currently generating about -0.06 per unit of risk. If you would invest 1,016 in Algoma Steel Group on September 4, 2024 and sell it today you would earn a total of 46.00 from holding Algoma Steel Group or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algoma Steel Group vs. Zhibao Technology Class
Performance |
| Timeline |
| Algoma Steel Group |
| Zhibao Technology Class |
Algoma Steel and Zhibao Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algoma Steel and Zhibao Technology
The main advantage of trading using opposite Algoma Steel and Zhibao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algoma Steel position performs unexpectedly, Zhibao Technology 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 Zhibao Technology will offset losses from the drop in Zhibao Technology's long position.| Algoma Steel vs. Friedman Industries | Algoma Steel vs. Algoma Steel Group | Algoma Steel vs. Reliance Steel Aluminum | Algoma Steel vs. Universal Stainless Alloy |
| Zhibao Technology vs. Algoma Steel Group | Zhibao Technology vs. Q2 Holdings | Zhibao Technology vs. Grupo Simec SAB | Zhibao Technology vs. Allegheny Technologies Incorporated |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |