Correlation Between ANGANG STEEL and Meta Financial
Can any of the company-specific risk be diversified away by investing in both ANGANG STEEL and Meta Financial 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 Meta Financial 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 Meta Financial Group, you can compare the effects of market volatilities on ANGANG STEEL and Meta Financial 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 Meta Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGANG STEEL and Meta Financial.
Diversification Opportunities for ANGANG STEEL and Meta Financial
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ANGANG and Meta is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding ANGANG STEEL H and Meta Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Financial Group 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 Meta Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Financial Group has no effect on the direction of ANGANG STEEL i.e., ANGANG STEEL and Meta Financial go up and down completely randomly.
Pair Corralation between ANGANG STEEL and Meta Financial
Assuming the 90 days trading horizon ANGANG STEEL is expected to generate 1.17 times less return on investment than Meta Financial. In addition to that, ANGANG STEEL is 2.29 times more volatile than Meta Financial Group. It trades about 0.04 of its total potential returns per unit of risk. Meta Financial Group is currently generating about 0.12 per unit of volatility. If you would invest 4,743 in Meta Financial Group on November 7, 2024 and sell it today you would earn a total of 3,007 from holding Meta Financial Group or generate 63.4% 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. Meta Financial Group
Performance |
| Timeline |
| ANGANG STEEL H |
| Meta Financial Group |
ANGANG STEEL and Meta Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGANG STEEL and Meta Financial
The main advantage of trading using opposite ANGANG STEEL and Meta Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGANG STEEL position performs unexpectedly, Meta Financial 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 Meta Financial will offset losses from the drop in Meta Financial's long position.| ANGANG STEEL vs. Universal Entertainment | ANGANG STEEL vs. Agilent Technologies | ANGANG STEEL vs. Allegheny Technologies Incorporated | ANGANG STEEL vs. PROSIEBENSAT1 MEDIADR4 |
| Meta Financial vs. Plastic Omnium | Meta Financial vs. GOODYEAR T RUBBER | Meta Financial vs. KOBE STEEL LTD | Meta Financial vs. Vulcan Materials |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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