Correlation Between Duluth Holdings and ArcelorMittal
Can any of the company-specific risk be diversified away by investing in both Duluth Holdings 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 Duluth Holdings and ArcelorMittal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duluth Holdings and ArcelorMittal SA ADR, you can compare the effects of market volatilities on Duluth Holdings 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 Duluth Holdings with a short position of ArcelorMittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duluth Holdings and ArcelorMittal.
Diversification Opportunities for Duluth Holdings and ArcelorMittal
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Duluth and ArcelorMittal is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Duluth Holdings and ArcelorMittal SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcelorMittal SA ADR and Duluth Holdings 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 Duluth Holdings 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 ADR has no effect on the direction of Duluth Holdings i.e., Duluth Holdings and ArcelorMittal go up and down completely randomly.
Pair Corralation between Duluth Holdings and ArcelorMittal
Given the investment horizon of 90 days Duluth Holdings is expected to under-perform the ArcelorMittal. In addition to that, Duluth Holdings is 1.48 times more volatile than ArcelorMittal SA ADR. It trades about -0.02 of its total potential returns per unit of risk. ArcelorMittal SA ADR is currently generating about 0.0 per unit of volatility. If you would invest 2,662 in ArcelorMittal SA ADR on September 3, 2024 and sell it today you would lose (134.00) from holding ArcelorMittal SA ADR or give up 5.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duluth Holdings vs. ArcelorMittal SA ADR
Performance |
| Timeline |
| Duluth Holdings |
| ArcelorMittal SA ADR |
Duluth Holdings and ArcelorMittal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duluth Holdings and ArcelorMittal
The main advantage of trading using opposite Duluth Holdings and ArcelorMittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duluth Holdings 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.| Duluth Holdings vs. Zumiez Inc | Duluth Holdings vs. JJill Inc | Duluth Holdings vs. Shoe Carnival | Duluth Holdings vs. Cato Corporation |
| ArcelorMittal vs. Olympic Steel | ArcelorMittal vs. Ternium SA ADR | ArcelorMittal vs. Gerdau SA ADR | ArcelorMittal vs. POSCO Holdings |
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.
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