Correlation Between Information Services and ANGANG STEEL
Can any of the company-specific risk be diversified away by investing in both Information Services 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 Information Services and ANGANG STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Information Services International Dentsu and ANGANG STEEL H , you can compare the effects of market volatilities on Information Services 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 Information Services with a short position of ANGANG STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Information Services and ANGANG STEEL.
Diversification Opportunities for Information Services and ANGANG STEEL
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Information and ANGANG is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Information Services Internati 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 Information Services 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 Information Services International Dentsu 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 Information Services i.e., Information Services and ANGANG STEEL go up and down completely randomly.
Pair Corralation between Information Services and ANGANG STEEL
Assuming the 90 days horizon Information Services International Dentsu is expected to under-perform the ANGANG STEEL. But the stock apears to be less risky and, when comparing its historical volatility, Information Services International Dentsu is 1.95 times less risky than ANGANG STEEL. The stock trades about -0.05 of its potential returns per unit of risk. The ANGANG STEEL H is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 19.00 in ANGANG STEEL H on December 12, 2024 and sell it today you would earn a total of 4.00 from holding ANGANG STEEL H or generate 21.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Information Services Internati vs. ANGANG STEEL H
Performance |
| Timeline |
| Information Services |
| ANGANG STEEL H |
Information Services and ANGANG STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Information Services and ANGANG STEEL
The main advantage of trading using opposite Information Services and ANGANG STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Information Services 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.| Information Services vs. INTER CARS SA | ||
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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