Correlation Between Metallic Minerals and Algoma Steel
Can any of the company-specific risk be diversified away by investing in both Metallic Minerals 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 Metallic Minerals and Algoma Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metallic Minerals Corp and Algoma Steel Group, you can compare the effects of market volatilities on Metallic Minerals 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 Metallic Minerals with a short position of Algoma Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metallic Minerals and Algoma Steel.
Diversification Opportunities for Metallic Minerals and Algoma Steel
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Metallic and Algoma is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Metallic Minerals 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 Metallic Minerals 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 Metallic Minerals 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 Metallic Minerals i.e., Metallic Minerals and Algoma Steel go up and down completely randomly.
Pair Corralation between Metallic Minerals and Algoma Steel
Assuming the 90 days horizon Metallic Minerals Corp is expected to under-perform the Algoma Steel. In addition to that, Metallic Minerals is 2.45 times more volatile than Algoma Steel Group. It trades about -0.3 of its total potential returns per unit of risk. Algoma Steel Group is currently generating about 0.04 per unit of volatility. If you would invest 1,037 in Algoma Steel Group on September 4, 2024 and sell it today you would earn a total of 19.00 from holding Algoma Steel Group or generate 1.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metallic Minerals Corp vs. Algoma Steel Group
Performance |
| Timeline |
| Metallic Minerals Corp |
| Algoma Steel Group |
Metallic Minerals and Algoma Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metallic Minerals and Algoma Steel
The main advantage of trading using opposite Metallic Minerals and Algoma Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metallic Minerals 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.| Metallic Minerals vs. Teuton Resources Corp | Metallic Minerals vs. Golden Goliath Resources | Metallic Minerals vs. Baroyeca Gold Silver | Metallic Minerals vs. Minera Alamos |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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