Correlation Between Insteel Industries and ANGANG STEEL
Can any of the company-specific risk be diversified away by investing in both Insteel Industries and ANGANG 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 Insteel Industries and ANGANG STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insteel Industries and ANGANG STEEL H , you can compare the effects of market volatilities on Insteel Industries and ANGANG 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 Insteel Industries with a short position of ANGANG STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insteel Industries and ANGANG STEEL.
Diversification Opportunities for Insteel Industries and ANGANG STEEL
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Insteel and ANGANG is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Insteel Industries and ANGANG STEEL H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGANG STEEL H and Insteel Industries 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 Insteel Industries are associated (or correlated) with ANGANG STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGANG STEEL H has no effect on the direction of Insteel Industries i.e., Insteel Industries and ANGANG STEEL go up and down completely randomly.
Pair Corralation between Insteel Industries and ANGANG STEEL
Assuming the 90 days horizon Insteel Industries is expected to generate 0.58 times more return on investment than ANGANG STEEL. However, Insteel Industries is 1.72 times less risky than ANGANG STEEL. It trades about 0.02 of its potential returns per unit of risk. ANGANG STEEL H is currently generating about 0.0 per unit of risk. If you would invest 2,541 in Insteel Industries on November 5, 2024 and sell it today you would earn a total of 239.00 from holding Insteel Industries or generate 9.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insteel Industries vs. ANGANG STEEL H
Performance |
| Timeline |
| Insteel Industries |
| ANGANG STEEL H |
Insteel Industries and ANGANG STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insteel Industries and ANGANG STEEL
The main advantage of trading using opposite Insteel Industries and ANGANG STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insteel Industries position performs unexpectedly, ANGANG 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 ANGANG STEEL will offset losses from the drop in ANGANG STEEL's long position.| Insteel Industries vs. CORNISH METALS INC | Insteel Industries vs. SEKISUI CHEMICAL | Insteel Industries vs. TRI CHEMICAL LABORATINC | Insteel Industries vs. Scandinavian Tobacco Group |
| ANGANG STEEL vs. National Retail Properties | ANGANG STEEL vs. H2O Retailing | ANGANG STEEL vs. TRADELINK ELECTRON | ANGANG STEEL vs. STRAYER EDUCATION |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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