Correlation Between Great Wes and Algoma Steel
Can any of the company-specific risk be diversified away by investing in both Great Wes and Algoma Steel 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 Great Wes and Algoma Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Wes 515 and Algoma Steel Group, you can compare the effects of market volatilities on Great Wes and Algoma Steel 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 Great Wes with a short position of Algoma Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Wes and Algoma Steel.
Diversification Opportunities for Great Wes and Algoma Steel
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Great and Algoma is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Great Wes 515 and Algoma Steel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algoma Steel Group and Great Wes 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 Great Wes 515 are associated (or correlated) with Algoma Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algoma Steel Group has no effect on the direction of Great Wes i.e., Great Wes and Algoma Steel go up and down completely randomly.
Pair Corralation between Great Wes and Algoma Steel
Assuming the 90 days trading horizon Great Wes 515 is expected to generate 0.28 times more return on investment than Algoma Steel. However, Great Wes 515 is 3.59 times less risky than Algoma Steel. It trades about 0.06 of its potential returns per unit of risk. Algoma Steel Group is currently generating about 0.01 per unit of risk. If you would invest 1,846 in Great Wes 515 on November 30, 2024 and sell it today you would earn a total of 402.00 from holding Great Wes 515 or generate 21.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Wes 515 vs. Algoma Steel Group
Performance |
| Timeline |
| Great Wes 515 |
| Algoma Steel Group |
Great Wes and Algoma Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Wes and Algoma Steel
The main advantage of trading using opposite Great Wes and Algoma Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Wes position performs unexpectedly, Algoma Steel 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 Algoma Steel will offset losses from the drop in Algoma Steel's long position.| Great Wes vs. Champion Gaming Group | Great Wes vs. Pace Metals | Great Wes vs. Nicola Mining | Great Wes vs. GoldQuest Mining Corp |
| Algoma Steel vs. Algoma Steel Group | Algoma Steel vs. Champion Iron | Algoma Steel vs. Ero Copper Corp | Algoma Steel vs. West Fraser Timber |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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