Correlation Between Marimaca Copper and Algoma Steel
Can any of the company-specific risk be diversified away by investing in both Marimaca Copper and Algoma Steel 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 Marimaca Copper and Algoma Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marimaca Copper Corp and Algoma Steel Group, you can compare the effects of market volatilities on Marimaca Copper and Algoma Steel 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 Marimaca Copper with a short position of Algoma Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marimaca Copper and Algoma Steel.
Diversification Opportunities for Marimaca Copper and Algoma Steel
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Marimaca and Algoma is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Marimaca Copper Corp and Algoma Steel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algoma Steel Group and Marimaca Copper 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 Marimaca Copper Corp are associated (or correlated) with Algoma Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algoma Steel Group has no effect on the direction of Marimaca Copper i.e., Marimaca Copper and Algoma Steel go up and down completely randomly.
Pair Corralation between Marimaca Copper and Algoma Steel
Assuming the 90 days trading horizon Marimaca Copper Corp is expected to generate 1.36 times more return on investment than Algoma Steel. However, Marimaca Copper is 1.36 times more volatile than Algoma Steel Group. It trades about 0.08 of its potential returns per unit of risk. Algoma Steel Group is currently generating about 0.04 per unit of risk. If you would invest 455.00 in Marimaca Copper Corp on September 4, 2024 and sell it today you would earn a total of 23.00 from holding Marimaca Copper Corp or generate 5.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marimaca Copper Corp vs. Algoma Steel Group
Performance |
| Timeline |
| Marimaca Copper Corp |
| Algoma Steel Group |
Marimaca Copper and Algoma Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marimaca Copper and Algoma Steel
The main advantage of trading using opposite Marimaca Copper and Algoma Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marimaca Copper position performs unexpectedly, Algoma Steel 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 Algoma Steel will offset losses from the drop in Algoma Steel's long position.| Marimaca Copper vs. First Majestic Silver | Marimaca Copper vs. Ivanhoe Energy | Marimaca Copper vs. Orezone Gold Corp | Marimaca Copper vs. Faraday Copper Corp |
| Algoma Steel vs. Friedman Industries | Algoma Steel vs. Algoma Steel Group | Algoma Steel vs. Reliance Steel Aluminum | Algoma Steel vs. Universal Stainless Alloy |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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