Correlation Between Maanshan Iron and Paiute Oil
Can any of the company-specific risk be diversified away by investing in both Maanshan Iron and Paiute Oil 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 Paiute Oil 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 Paiute Oil Mining, you can compare the effects of market volatilities on Maanshan Iron and Paiute Oil 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 Paiute Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maanshan Iron and Paiute Oil.
Diversification Opportunities for Maanshan Iron and Paiute Oil
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Maanshan and Paiute is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Maanshan Iron Steel and Paiute Oil Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paiute Oil Mining 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 Paiute Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paiute Oil Mining has no effect on the direction of Maanshan Iron i.e., Maanshan Iron and Paiute Oil go up and down completely randomly.
Pair Corralation between Maanshan Iron and Paiute Oil
If you would invest 18.00 in Maanshan Iron Steel on November 27, 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 | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Maanshan Iron Steel vs. Paiute Oil Mining
Performance |
| Timeline |
| Maanshan Iron Steel |
| Paiute Oil Mining |
Maanshan Iron and Paiute Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maanshan Iron and Paiute Oil
The main advantage of trading using opposite Maanshan Iron and Paiute Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maanshan Iron position performs unexpectedly, Paiute Oil 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 Paiute Oil will offset losses from the drop in Paiute Oil's long position.| Maanshan Iron vs. Nucor Corp | Maanshan Iron vs. United States Steel | Maanshan Iron vs. Reliance Steel Aluminum | Maanshan Iron vs. ArcelorMittal SA ADR |
| Paiute Oil vs. Regeneron Pharmaceuticals | Paiute Oil vs. Cementos Pacasmayo SAA | Paiute Oil vs. Highway Holdings Limited | Paiute Oil vs. Apogee Therapeutics, Common |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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