Correlation Between Golden Star and Algoma Steel
Can any of the company-specific risk be diversified away by investing in both Golden Star and Algoma Steel 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 Golden Star and Algoma Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Star Resource and Algoma Steel Group, you can compare the effects of market volatilities on Golden Star and Algoma Steel 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 Golden Star with a short position of Algoma Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Star and Algoma Steel.
Diversification Opportunities for Golden Star and Algoma Steel
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Golden and Algoma is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Golden Star Resource and Algoma Steel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algoma Steel Group and Golden Star 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 Golden Star Resource are associated (or correlated) with Algoma Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algoma Steel Group has no effect on the direction of Golden Star i.e., Golden Star and Algoma Steel go up and down completely randomly.
Pair Corralation between Golden Star and Algoma Steel
If you would invest 1,023 in Algoma Steel Group on August 29, 2024 and sell it today you would earn a total of 48.00 from holding Algoma Steel Group or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Golden Star Resource vs. Algoma Steel Group
Performance |
| Timeline |
| Golden Star Resource |
| Algoma Steel Group |
Golden Star and Algoma Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Star and Algoma Steel
The main advantage of trading using opposite Golden Star and Algoma Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Star position performs unexpectedly, Algoma Steel 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 Algoma Steel will offset losses from the drop in Algoma Steel's long position.| Golden Star vs. China Aircraft Leasing | Golden Star vs. NetSol Technologies | Golden Star vs. Zhihu Inc ADR | Golden Star vs. Q2 Holdings |
| Algoma Steel vs. Friedman Industries | Algoma Steel vs. Aperam PK | Algoma Steel vs. Acerinox SA ADR | Algoma Steel vs. Algoma Steel 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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