Correlation Between American Hotel and Algoma Steel
Can any of the company-specific risk be diversified away by investing in both American Hotel 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 American Hotel and Algoma Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Hotel Income and Algoma Steel Group, you can compare the effects of market volatilities on American Hotel 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 American Hotel with a short position of Algoma Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Hotel and Algoma Steel.
Diversification Opportunities for American Hotel and Algoma Steel
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Algoma is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding American Hotel Income 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 American Hotel 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 American Hotel Income 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 American Hotel i.e., American Hotel and Algoma Steel go up and down completely randomly.
Pair Corralation between American Hotel and Algoma Steel
Assuming the 90 days trading horizon American Hotel Income is expected to under-perform the Algoma Steel. In addition to that, American Hotel is 1.1 times more volatile than Algoma Steel Group. It trades about -0.28 of its total potential returns per unit of risk. Algoma Steel Group is currently generating about 0.08 per unit of volatility. If you would invest 1,386 in Algoma Steel Group on August 30, 2024 and sell it today you would earn a total of 109.00 from holding Algoma Steel Group or generate 7.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
American Hotel Income vs. Algoma Steel Group
Performance |
| Timeline |
| American Hotel Income |
| Algoma Steel Group |
American Hotel and Algoma Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Hotel and Algoma Steel
The main advantage of trading using opposite American Hotel and Algoma Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Hotel 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.| American Hotel vs. Brookfield Investments | American Hotel vs. NorthWest Healthcare Properties | American Hotel vs. WELL Health Technologies | American Hotel vs. NeuPath Health |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |