Correlation Between Maanshan Iron and Aimfinity Investment
Can any of the company-specific risk be diversified away by investing in both Maanshan Iron and Aimfinity Investment 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 Maanshan Iron and Aimfinity Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maanshan Iron Steel and Aimfinity Investment I, you can compare the effects of market volatilities on Maanshan Iron and Aimfinity Investment 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 Maanshan Iron with a short position of Aimfinity Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maanshan Iron and Aimfinity Investment.
Diversification Opportunities for Maanshan Iron and Aimfinity Investment
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Maanshan and Aimfinity is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Maanshan Iron Steel and Aimfinity Investment I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aimfinity Investment and Maanshan Iron 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 Maanshan Iron Steel are associated (or correlated) with Aimfinity Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aimfinity Investment has no effect on the direction of Maanshan Iron i.e., Maanshan Iron and Aimfinity Investment go up and down completely randomly.
Pair Corralation between Maanshan Iron and Aimfinity Investment
Assuming the 90 days horizon Maanshan Iron Steel is expected to generate 11.8 times more return on investment than Aimfinity Investment. However, Maanshan Iron is 11.8 times more volatile than Aimfinity Investment I. It trades about 0.02 of its potential returns per unit of risk. Aimfinity Investment I is currently generating about 0.17 per unit of risk. If you would invest 12.00 in Maanshan Iron Steel on September 5, 2024 and sell it today you would earn a total of 0.00 from holding Maanshan Iron Steel or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maanshan Iron Steel vs. Aimfinity Investment I
Performance |
| Timeline |
| Maanshan Iron Steel |
| Aimfinity Investment |
Maanshan Iron and Aimfinity Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maanshan Iron and Aimfinity Investment
The main advantage of trading using opposite Maanshan Iron and Aimfinity Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maanshan Iron position performs unexpectedly, Aimfinity Investment 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 Aimfinity Investment will offset losses from the drop in Aimfinity Investment's long position.| Maanshan Iron vs. ArcelorMittal SA ADR | Maanshan Iron vs. Gerdau SA ADR | Maanshan Iron vs. POSCO Holdings |
| Aimfinity Investment vs. Freedom Holding Corp | Aimfinity Investment vs. Maanshan Iron Steel | Aimfinity Investment vs. Insteel Industries | Aimfinity Investment vs. Nomura Holdings ADR |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |