Correlation Between Maanshan Iron and Apogee Enterprises
Can any of the company-specific risk be diversified away by investing in both Maanshan Iron and Apogee Enterprises 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 Apogee Enterprises 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 Apogee Enterprises, you can compare the effects of market volatilities on Maanshan Iron and Apogee Enterprises 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 Apogee Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maanshan Iron and Apogee Enterprises.
Diversification Opportunities for Maanshan Iron and Apogee Enterprises
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Maanshan and Apogee is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Maanshan Iron Steel and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises 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 Apogee Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apogee Enterprises has no effect on the direction of Maanshan Iron i.e., Maanshan Iron and Apogee Enterprises go up and down completely randomly.
Pair Corralation between Maanshan Iron and Apogee Enterprises
Assuming the 90 days horizon Maanshan Iron Steel is expected to generate 4.76 times more return on investment than Apogee Enterprises. However, Maanshan Iron is 4.76 times more volatile than Apogee Enterprises. It trades about 0.05 of its potential returns per unit of risk. Apogee Enterprises is currently generating about 0.02 per unit of risk. If you would invest 21.00 in Maanshan Iron Steel on November 29, 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 Against |
Strength | Weak |
Accuracy | 14.98% |
Values | Daily Returns |
Maanshan Iron Steel vs. Apogee Enterprises
Performance |
Timeline |
Maanshan Iron Steel |
Apogee Enterprises |
Maanshan Iron and Apogee Enterprises Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Maanshan Iron and Apogee Enterprises
The main advantage of trading using opposite Maanshan Iron and Apogee Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maanshan Iron position performs unexpectedly, Apogee Enterprises 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 Apogee Enterprises will offset losses from the drop in Apogee Enterprises' long position.Maanshan Iron vs. ArcelorMittal SA ADR | Maanshan Iron vs. Gerdau SA ADR | Maanshan Iron vs. POSCO Holdings |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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