Correlation Between GX AI and ArcelorMittal
Can any of the company-specific risk be diversified away by investing in both GX AI and ArcelorMittal 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 GX AI and ArcelorMittal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GX AI TECH and ArcelorMittal SA, you can compare the effects of market volatilities on GX AI and ArcelorMittal 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 GX AI with a short position of ArcelorMittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of GX AI and ArcelorMittal.
Diversification Opportunities for GX AI and ArcelorMittal
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BAIQ39 and ArcelorMittal is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding GX AI TECH and ArcelorMittal SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcelorMittal SA and GX AI 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 GX AI TECH are associated (or correlated) with ArcelorMittal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ArcelorMittal SA has no effect on the direction of GX AI i.e., GX AI and ArcelorMittal go up and down completely randomly.
Pair Corralation between GX AI and ArcelorMittal
Assuming the 90 days trading horizon GX AI TECH is expected to generate 0.53 times more return on investment than ArcelorMittal. However, GX AI TECH is 1.9 times less risky than ArcelorMittal. It trades about 0.27 of its potential returns per unit of risk. ArcelorMittal SA is currently generating about 0.12 per unit of risk. If you would invest 7,481 in GX AI TECH on September 12, 2024 and sell it today you would earn a total of 543.00 from holding GX AI TECH or generate 7.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
GX AI TECH vs. ArcelorMittal SA
Performance |
| Timeline |
| GX AI TECH |
| ArcelorMittal SA |
GX AI and ArcelorMittal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GX AI and ArcelorMittal
The main advantage of trading using opposite GX AI and ArcelorMittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GX AI position performs unexpectedly, ArcelorMittal 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 ArcelorMittal will offset losses from the drop in ArcelorMittal's long position.| GX AI vs. Taiwan Semiconductor Manufacturing | GX AI vs. Apple Inc | GX AI vs. Alibaba Group Holding | GX AI vs. Microsoft |
| ArcelorMittal vs. Uber Technologies | ArcelorMittal vs. GX AI TECH | ArcelorMittal vs. British American Tobacco | ArcelorMittal vs. Lupatech SA |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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