Correlation Between Algoma Steel and Social Leverage
Can any of the company-specific risk be diversified away by investing in both Algoma Steel and Social Leverage 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 Social Leverage 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 Social Leverage Acquisition, you can compare the effects of market volatilities on Algoma Steel and Social Leverage 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 Social Leverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algoma Steel and Social Leverage.
Diversification Opportunities for Algoma Steel and Social Leverage
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Algoma and Social is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Algoma Steel Group and Social Leverage Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Social Leverage Acqu 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 Social Leverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Social Leverage Acqu has no effect on the direction of Algoma Steel i.e., Algoma Steel and Social Leverage go up and down completely randomly.
Pair Corralation between Algoma Steel and Social Leverage
Assuming the 90 days horizon Algoma Steel Group is expected to generate 11.49 times more return on investment than Social Leverage. However, Algoma Steel is 11.49 times more volatile than Social Leverage Acquisition. It trades about 0.04 of its potential returns per unit of risk. Social Leverage Acquisition is currently generating about 0.02 per unit of risk. If you would invest 116.00 in Algoma Steel Group on August 30, 2024 and sell it today you would earn a total of 71.00 from holding Algoma Steel Group or generate 61.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.44% |
| Values | Daily Returns |
Algoma Steel Group vs. Social Leverage Acquisition
Performance |
| Timeline |
| Algoma Steel Group |
| Social Leverage Acqu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Algoma Steel and Social Leverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algoma Steel and Social Leverage
The main advantage of trading using opposite Algoma Steel and Social Leverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algoma Steel position performs unexpectedly, Social Leverage 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 Social Leverage will offset losses from the drop in Social Leverage's long position.| Algoma Steel vs. Algoma Steel Group | Algoma Steel vs. Evolv Technologies Holdings | Algoma Steel vs. Valens Semiconductor |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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