Correlation Between Shift4 Payments and Arcelormittal
Can any of the company-specific risk be diversified away by investing in both Shift4 Payments 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 Shift4 Payments and Arcelormittal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shift4 Payments and Arcelormittal, you can compare the effects of market volatilities on Shift4 Payments 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 Shift4 Payments with a short position of Arcelormittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shift4 Payments and Arcelormittal.
Diversification Opportunities for Shift4 Payments and Arcelormittal
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shift4 and Arcelormittal is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Shift4 Payments and Arcelormittal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcelormittal and Shift4 Payments 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 Shift4 Payments 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 has no effect on the direction of Shift4 Payments i.e., Shift4 Payments and Arcelormittal go up and down completely randomly.
Pair Corralation between Shift4 Payments and Arcelormittal
Given the investment horizon of 90 days Shift4 Payments is expected to generate 1.27 times more return on investment than Arcelormittal. However, Shift4 Payments is 1.27 times more volatile than Arcelormittal. It trades about 0.07 of its potential returns per unit of risk. Arcelormittal is currently generating about -0.21 per unit of risk. If you would invest 6,167 in Shift4 Payments on August 30, 2024 and sell it today you would earn a total of 5,328 from holding Shift4 Payments or generate 86.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 2.28% |
| Values | Daily Returns |
Shift4 Payments vs. Arcelormittal
Performance |
| Timeline |
| Shift4 Payments |
| Arcelormittal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shift4 Payments and Arcelormittal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shift4 Payments and Arcelormittal
The main advantage of trading using opposite Shift4 Payments and Arcelormittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shift4 Payments 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.| Shift4 Payments vs. SentinelOne | Shift4 Payments vs. Confluent | Shift4 Payments vs. Hashicorp | Shift4 Payments vs. MongoDB |
| Arcelormittal vs. Affiliated Managers Group | Arcelormittal vs. Maiden Holdings North | Arcelormittal vs. Credit Enhanced Corts | Arcelormittal vs. Affiliated Managers Group, |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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