Correlation Between Insteel Industries and Maanshan Iron
Can any of the company-specific risk be diversified away by investing in both Insteel Industries and Maanshan Iron 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 Maanshan Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insteel Industries and Maanshan Iron Steel, you can compare the effects of market volatilities on Insteel Industries and Maanshan Iron 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 Maanshan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insteel Industries and Maanshan Iron.
Diversification Opportunities for Insteel Industries and Maanshan Iron
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Insteel and Maanshan is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Insteel Industries and Maanshan Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maanshan Iron Steel 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 Maanshan Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maanshan Iron Steel has no effect on the direction of Insteel Industries i.e., Insteel Industries and Maanshan Iron go up and down completely randomly.
Pair Corralation between Insteel Industries and Maanshan Iron
Given the investment horizon of 90 days Insteel Industries is expected to generate 11.05 times less return on investment than Maanshan Iron. But when comparing it to its historical volatility, Insteel Industries is 3.94 times less risky than Maanshan Iron. It trades about 0.02 of its potential returns per unit of risk. Maanshan Iron Steel is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Maanshan Iron Steel on January 20, 2025 and sell it today you would earn a total of 3.00 from holding Maanshan Iron Steel or generate 15.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 21.82% |
| Values | Daily Returns |
Insteel Industries vs. Maanshan Iron Steel
Performance |
| Timeline |
| Insteel Industries |
| Maanshan Iron Steel |
Insteel Industries and Maanshan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insteel Industries and Maanshan Iron
The main advantage of trading using opposite Insteel Industries and Maanshan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insteel Industries position performs unexpectedly, Maanshan Iron 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 Maanshan Iron will offset losses from the drop in Maanshan Iron's long position.| Insteel Industries vs. Mayville Engineering Co | Insteel Industries vs. Gulf Island Fabrication | Insteel Industries vs. ESAB Corp | Insteel Industries vs. Northwest Pipe |
| Maanshan Iron vs. ArcelorMittal SA ADR | Maanshan Iron vs. Gerdau SA ADR | Maanshan Iron vs. POSCO Holdings | Maanshan Iron vs. Aquagold International |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Stocks Directory Find actively traded stocks across global markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| CEOs Directory Screen CEOs from public companies around the world |