Correlation Between ANGANG STEEL and Mount Gibson
Can any of the company-specific risk be diversified away by investing in both ANGANG STEEL and Mount Gibson 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 Mount Gibson 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 Mount Gibson Iron, you can compare the effects of market volatilities on ANGANG STEEL and Mount Gibson 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 Mount Gibson. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGANG STEEL and Mount Gibson.
Diversification Opportunities for ANGANG STEEL and Mount Gibson
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ANGANG and Mount is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding ANGANG STEEL H and Mount Gibson Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mount Gibson Iron 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 Mount Gibson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mount Gibson Iron has no effect on the direction of ANGANG STEEL i.e., ANGANG STEEL and Mount Gibson go up and down completely randomly.
Pair Corralation between ANGANG STEEL and Mount Gibson
Assuming the 90 days trading horizon ANGANG STEEL H is expected to generate 0.72 times more return on investment than Mount Gibson. However, ANGANG STEEL H is 1.4 times less risky than Mount Gibson. It trades about 0.04 of its potential returns per unit of risk. Mount Gibson Iron is currently generating about -0.01 per unit of risk. If you would invest 17.00 in ANGANG STEEL H on December 11, 2024 and sell it today you would earn a total of 6.00 from holding ANGANG STEEL H or generate 35.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.68% |
| Values | Daily Returns |
ANGANG STEEL H vs. Mount Gibson Iron
Performance |
| Timeline |
| ANGANG STEEL H |
| Mount Gibson Iron |
ANGANG STEEL and Mount Gibson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGANG STEEL and Mount Gibson
The main advantage of trading using opposite ANGANG STEEL and Mount Gibson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGANG STEEL position performs unexpectedly, Mount Gibson 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 Mount Gibson will offset losses from the drop in Mount Gibson's long position.| ANGANG STEEL vs. China Eastern Airlines | ||
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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