Correlation Between ANGANG STEEL and Charter Communications
Can any of the company-specific risk be diversified away by investing in both ANGANG STEEL and Charter Communications 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 Charter Communications 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 Charter Communications, you can compare the effects of market volatilities on ANGANG STEEL and Charter Communications 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 Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGANG STEEL and Charter Communications.
Diversification Opportunities for ANGANG STEEL and Charter Communications
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ANGANG and Charter is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding ANGANG STEEL H and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications 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 Charter Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Communications has no effect on the direction of ANGANG STEEL i.e., ANGANG STEEL and Charter Communications go up and down completely randomly.
Pair Corralation between ANGANG STEEL and Charter Communications
Assuming the 90 days trading horizon ANGANG STEEL H is expected to generate 1.65 times more return on investment than Charter Communications. However, ANGANG STEEL is 1.65 times more volatile than Charter Communications. It trades about 0.07 of its potential returns per unit of risk. Charter Communications is currently generating about 0.01 per unit of risk. If you would invest 14.00 in ANGANG STEEL H on November 7, 2024 and sell it today you would earn a total of 4.00 from holding ANGANG STEEL H or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGANG STEEL H vs. Charter Communications
Performance |
| Timeline |
| ANGANG STEEL H |
| Charter Communications |
ANGANG STEEL and Charter Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGANG STEEL and Charter Communications
The main advantage of trading using opposite ANGANG STEEL and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGANG STEEL position performs unexpectedly, Charter Communications 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 Charter Communications will offset losses from the drop in Charter Communications' long position.| ANGANG STEEL vs. Apple Inc | ANGANG STEEL vs. Apple Inc | ANGANG STEEL vs. Apple Inc | ANGANG STEEL vs. Apple Inc |
| Charter Communications vs. Check Point Software | Charter Communications vs. Alfa Financial Software | Charter Communications vs. Easy Software AG | Charter Communications vs. MAGNUM MINING EXP |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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