Correlation Between ANGANG STEEL and MPH Health
Can any of the company-specific risk be diversified away by investing in both ANGANG STEEL and MPH Health 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 MPH Health 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 MPH Health Care, you can compare the effects of market volatilities on ANGANG STEEL and MPH Health 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 MPH Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGANG STEEL and MPH Health.
Diversification Opportunities for ANGANG STEEL and MPH Health
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ANGANG and MPH is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding ANGANG STEEL H and MPH Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPH Health Care 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 MPH Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPH Health Care has no effect on the direction of ANGANG STEEL i.e., ANGANG STEEL and MPH Health go up and down completely randomly.
Pair Corralation between ANGANG STEEL and MPH Health
Assuming the 90 days trading horizon ANGANG STEEL H is expected to generate 3.01 times more return on investment than MPH Health. However, ANGANG STEEL is 3.01 times more volatile than MPH Health Care. It trades about 0.1 of its potential returns per unit of risk. MPH Health Care is currently generating about -0.07 per unit of risk. If you would invest 17.00 in ANGANG STEEL H on November 20, 2024 and sell it today you would earn a total of 1.00 from holding ANGANG STEEL H or generate 5.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
ANGANG STEEL H vs. MPH Health Care
Performance |
Timeline |
ANGANG STEEL H |
MPH Health Care |
ANGANG STEEL and MPH Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ANGANG STEEL and MPH Health
The main advantage of trading using opposite ANGANG STEEL and MPH Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGANG STEEL position performs unexpectedly, MPH Health 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 MPH Health will offset losses from the drop in MPH Health's long position.ANGANG STEEL vs. Nok Airlines PCL | ||
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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