Correlation Between Ferrexpo PLC and Stelco Holdings
Can any of the company-specific risk be diversified away by investing in both Ferrexpo PLC and Stelco Holdings 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 Ferrexpo PLC and Stelco Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferrexpo PLC and Stelco Holdings, you can compare the effects of market volatilities on Ferrexpo PLC and Stelco Holdings 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 Ferrexpo PLC with a short position of Stelco Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferrexpo PLC and Stelco Holdings.
Diversification Opportunities for Ferrexpo PLC and Stelco Holdings
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ferrexpo and Stelco is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ferrexpo PLC and Stelco Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stelco Holdings and Ferrexpo PLC 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 Ferrexpo PLC are associated (or correlated) with Stelco Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stelco Holdings has no effect on the direction of Ferrexpo PLC i.e., Ferrexpo PLC and Stelco Holdings go up and down completely randomly.
Pair Corralation between Ferrexpo PLC and Stelco Holdings
If you would invest 100.00 in Ferrexpo PLC on September 12, 2024 and sell it today you would earn a total of 70.00 from holding Ferrexpo PLC or generate 70.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Ferrexpo PLC vs. Stelco Holdings
Performance |
| Timeline |
| Ferrexpo PLC |
| Stelco Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Ferrexpo PLC and Stelco Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferrexpo PLC and Stelco Holdings
The main advantage of trading using opposite Ferrexpo PLC and Stelco Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferrexpo PLC position performs unexpectedly, Stelco Holdings 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 Stelco Holdings will offset losses from the drop in Stelco Holdings' long position.| Ferrexpo PLC vs. ArcelorMittal SA ADR | Ferrexpo PLC vs. Gerdau SA ADR | Ferrexpo PLC vs. POSCO Holdings | Ferrexpo PLC vs. HUMANA INC |
| Stelco Holdings vs. ArcelorMittal SA | Stelco Holdings vs. Acerinox SA ADR | Stelco Holdings vs. Aperam PK | Stelco Holdings vs. Ferrexpo PLC |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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