Correlation Between Maanshan Iron and Amexdrug
Can any of the company-specific risk be diversified away by investing in both Maanshan Iron and Amexdrug 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 Amexdrug 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 Amexdrug, you can compare the effects of market volatilities on Maanshan Iron and Amexdrug 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 Amexdrug. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maanshan Iron and Amexdrug.
Diversification Opportunities for Maanshan Iron and Amexdrug
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Maanshan and Amexdrug is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Maanshan Iron Steel and Amexdrug in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amexdrug 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 Amexdrug. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amexdrug has no effect on the direction of Maanshan Iron i.e., Maanshan Iron and Amexdrug go up and down completely randomly.
Pair Corralation between Maanshan Iron and Amexdrug
If you would invest 18.00 in Maanshan Iron Steel on December 1, 2024 and sell it today you would earn a total of 3.00 from holding Maanshan Iron Steel or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Maanshan Iron Steel vs. Amexdrug
Performance |
| Timeline |
| Maanshan Iron Steel |
| Amexdrug |
Maanshan Iron and Amexdrug Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maanshan Iron and Amexdrug
The main advantage of trading using opposite Maanshan Iron and Amexdrug positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maanshan Iron position performs unexpectedly, Amexdrug 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 Amexdrug will offset losses from the drop in Amexdrug's long position.| Maanshan Iron vs. ArcelorMittal SA ADR | Maanshan Iron vs. Gerdau SA ADR | Maanshan Iron 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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