Correlation Between Maanshan Iron and Integral
Can any of the company-specific risk be diversified away by investing in both Maanshan Iron and Integral 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 Integral 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 Integral Ad Science, you can compare the effects of market volatilities on Maanshan Iron and Integral 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 Integral. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maanshan Iron and Integral.
Diversification Opportunities for Maanshan Iron and Integral
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Maanshan and Integral is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Maanshan Iron Steel and Integral Ad Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integral Ad Science 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 Integral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integral Ad Science has no effect on the direction of Maanshan Iron i.e., Maanshan Iron and Integral go up and down completely randomly.
Pair Corralation between Maanshan Iron and Integral
Assuming the 90 days horizon Maanshan Iron Steel is expected to under-perform the Integral. In addition to that, Maanshan Iron is 1.12 times more volatile than Integral Ad Science. It trades about -0.22 of its total potential returns per unit of risk. Integral Ad Science is currently generating about -0.05 per unit of volatility. If you would invest 1,185 in Integral Ad Science on September 3, 2024 and sell it today you would lose (67.00) from holding Integral Ad Science or give up 5.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maanshan Iron Steel vs. Integral Ad Science
Performance |
| Timeline |
| Maanshan Iron Steel |
| Integral Ad Science |
Maanshan Iron and Integral Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maanshan Iron and Integral
The main advantage of trading using opposite Maanshan Iron and Integral positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maanshan Iron position performs unexpectedly, Integral 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 Integral will offset losses from the drop in Integral's long position.| Maanshan Iron vs. Ta Chen Stainless | Maanshan Iron vs. Gerdau SA | Maanshan Iron vs. Gerdau SA | Maanshan Iron vs. Nucor Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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