Correlation Between LianDi Clean and ArcelorMittal
Can any of the company-specific risk be diversified away by investing in both LianDi Clean and ArcelorMittal 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 LianDi Clean and ArcelorMittal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LianDi Clean Technology and ArcelorMittal SA ADR, you can compare the effects of market volatilities on LianDi Clean and ArcelorMittal 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 LianDi Clean with a short position of ArcelorMittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of LianDi Clean and ArcelorMittal.
Diversification Opportunities for LianDi Clean and ArcelorMittal
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LianDi and ArcelorMittal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LianDi Clean Technology and ArcelorMittal SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcelorMittal SA ADR and LianDi Clean 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 LianDi Clean Technology are associated (or correlated) with ArcelorMittal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ArcelorMittal SA ADR has no effect on the direction of LianDi Clean i.e., LianDi Clean and ArcelorMittal go up and down completely randomly.
Pair Corralation between LianDi Clean and ArcelorMittal
Given the investment horizon of 90 days LianDi Clean Technology is expected to under-perform the ArcelorMittal. In addition to that, LianDi Clean is 5.79 times more volatile than ArcelorMittal SA ADR. It trades about -0.22 of its total potential returns per unit of risk. ArcelorMittal SA ADR is currently generating about 0.25 per unit of volatility. If you would invest 2,313 in ArcelorMittal SA ADR on November 1, 2024 and sell it today you would earn a total of 217.50 from holding ArcelorMittal SA ADR or generate 9.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
LianDi Clean Technology vs. ArcelorMittal SA ADR
Performance |
| Timeline |
| LianDi Clean Technology |
| ArcelorMittal SA ADR |
LianDi Clean and ArcelorMittal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LianDi Clean and ArcelorMittal
The main advantage of trading using opposite LianDi Clean and ArcelorMittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LianDi Clean position performs unexpectedly, ArcelorMittal 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 ArcelorMittal will offset losses from the drop in ArcelorMittal's long position.| LianDi Clean vs. Enerflex | LianDi Clean vs. Natural Gas Services | LianDi Clean vs. Archrock | LianDi Clean vs. Geospace Technologies |
| ArcelorMittal vs. Olympic Steel | ArcelorMittal vs. Ternium SA ADR | ArcelorMittal vs. Gerdau SA ADR | ArcelorMittal vs. POSCO Holdings |
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 Stocks Directory module to find actively traded stocks across global markets.
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