Correlation Between HITACHI STRMACHADR2 and ALGOMA STEEL
Can any of the company-specific risk be diversified away by investing in both HITACHI STRMACHADR2 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 HITACHI STRMACHADR2 and ALGOMA STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HITACHI STRMACHADR2 and ALGOMA STEEL GROUP, you can compare the effects of market volatilities on HITACHI STRMACHADR2 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 HITACHI STRMACHADR2 with a short position of ALGOMA STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of HITACHI STRMACHADR2 and ALGOMA STEEL.
Diversification Opportunities for HITACHI STRMACHADR2 and ALGOMA STEEL
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HITACHI and ALGOMA is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding HITACHI STRMACHADR2 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 HITACHI STRMACHADR2 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 HITACHI STRMACHADR2 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 HITACHI STRMACHADR2 i.e., HITACHI STRMACHADR2 and ALGOMA STEEL go up and down completely randomly.
Pair Corralation between HITACHI STRMACHADR2 and ALGOMA STEEL
Assuming the 90 days trading horizon HITACHI STRMACHADR2 is expected to under-perform the ALGOMA STEEL. But the stock apears to be less risky and, when comparing its historical volatility, HITACHI STRMACHADR2 is 1.01 times less risky than ALGOMA STEEL. The stock trades about -0.01 of its potential returns per unit of risk. The ALGOMA STEEL GROUP is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 633.00 in ALGOMA STEEL GROUP on August 28, 2024 and sell it today you would earn a total of 427.00 from holding ALGOMA STEEL GROUP or generate 67.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
HITACHI STRMACHADR2 vs. ALGOMA STEEL GROUP
Performance |
| Timeline |
| HITACHI STRMACHADR2 |
| ALGOMA STEEL GROUP |
HITACHI STRMACHADR2 and ALGOMA STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HITACHI STRMACHADR2 and ALGOMA STEEL
The main advantage of trading using opposite HITACHI STRMACHADR2 and ALGOMA STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HITACHI STRMACHADR2 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.| HITACHI STRMACHADR2 vs. Superior Plus Corp | HITACHI STRMACHADR2 vs. NMI Holdings | HITACHI STRMACHADR2 vs. Origin Agritech | HITACHI STRMACHADR2 vs. SIVERS SEMICONDUCTORS AB |
| ALGOMA STEEL vs. PLAY2CHILL SA ZY | ALGOMA STEEL vs. GREENX METALS LTD | ALGOMA STEEL vs. Harmony Gold Mining | ALGOMA STEEL vs. GRIFFIN MINING LTD |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| CEOs Directory Screen CEOs from public companies around the world | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |