Correlation Between ANGANG STEEL and NN Group
Can any of the company-specific risk be diversified away by investing in both ANGANG STEEL and NN Group 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 ANGANG STEEL and NN Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGANG STEEL H and NN Group NV, you can compare the effects of market volatilities on ANGANG STEEL and NN Group 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 ANGANG STEEL with a short position of NN Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGANG STEEL and NN Group.
Diversification Opportunities for ANGANG STEEL and NN Group
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between ANGANG and 2NN is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding ANGANG STEEL H and NN Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NN Group NV and ANGANG STEEL 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 ANGANG STEEL H are associated (or correlated) with NN Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NN Group NV has no effect on the direction of ANGANG STEEL i.e., ANGANG STEEL and NN Group go up and down completely randomly.
Pair Corralation between ANGANG STEEL and NN Group
Assuming the 90 days trading horizon ANGANG STEEL H is expected to generate 3.7 times more return on investment than NN Group. However, ANGANG STEEL is 3.7 times more volatile than NN Group NV. It trades about 0.06 of its potential returns per unit of risk. NN Group NV is currently generating about 0.11 per unit of risk. If you would invest 18.00 in ANGANG STEEL H on November 3, 2024 and sell it today you would earn a total of 1.00 from holding ANGANG STEEL H or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGANG STEEL H vs. NN Group NV
Performance |
| Timeline |
| ANGANG STEEL H |
| NN Group NV |
ANGANG STEEL and NN Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGANG STEEL and NN Group
The main advantage of trading using opposite ANGANG STEEL and NN Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGANG STEEL position performs unexpectedly, NN Group 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 NN Group will offset losses from the drop in NN Group's long position.| ANGANG STEEL vs. Apple Inc | ANGANG STEEL vs. Apple Inc | ANGANG STEEL vs. Apple Inc | ANGANG STEEL vs. Apple Inc |
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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 Valuation module to check real value of public entities based on technical and fundamental data.
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