Correlation Between Yuexiu Transport and Algoma Steel
Can any of the company-specific risk be diversified away by investing in both Yuexiu Transport 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 Yuexiu Transport and Algoma Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuexiu Transport Infrastructure and Algoma Steel Group, you can compare the effects of market volatilities on Yuexiu Transport 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 Yuexiu Transport with a short position of Algoma Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuexiu Transport and Algoma Steel.
Diversification Opportunities for Yuexiu Transport and Algoma Steel
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Yuexiu and Algoma is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur 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 Yuexiu Transport 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 Yuexiu Transport Infrastructure 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 Yuexiu Transport i.e., Yuexiu Transport and Algoma Steel go up and down completely randomly.
Pair Corralation between Yuexiu Transport and Algoma Steel
Assuming the 90 days horizon Yuexiu Transport Infrastructure is expected to generate 1.32 times more return on investment than Algoma Steel. However, Yuexiu Transport is 1.32 times more volatile than Algoma Steel Group. It trades about 0.11 of its potential returns per unit of risk. Algoma Steel Group is currently generating about 0.05 per unit of risk. If you would invest 18.00 in Yuexiu Transport Infrastructure on September 1, 2024 and sell it today you would earn a total of 40.00 from holding Yuexiu Transport Infrastructure or generate 222.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuexiu Transport Infrastructur vs. Algoma Steel Group
Performance |
| Timeline |
| Yuexiu Transport Inf |
| Algoma Steel Group |
Yuexiu Transport and Algoma Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuexiu Transport and Algoma Steel
The main advantage of trading using opposite Yuexiu Transport and Algoma Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuexiu Transport 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.| Yuexiu Transport vs. Verra Mobility Corp | Yuexiu Transport vs. HUMANA INC | Yuexiu Transport vs. SCOR PK | Yuexiu Transport vs. Aquagold International |
| Algoma Steel vs. Friedman Industries | Algoma Steel vs. ArcelorMittal SA | Algoma Steel vs. Aperam PK | Algoma Steel vs. Acerinox SA ADR |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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