Correlation Between Mesabi Trust and ArcelorMittal
Can any of the company-specific risk be diversified away by investing in both Mesabi Trust and ArcelorMittal 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 Mesabi Trust and ArcelorMittal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mesabi Trust and ArcelorMittal SA ADR, you can compare the effects of market volatilities on Mesabi Trust and ArcelorMittal 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 Mesabi Trust with a short position of ArcelorMittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesabi Trust and ArcelorMittal.
Diversification Opportunities for Mesabi Trust and ArcelorMittal
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mesabi and ArcelorMittal is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Mesabi Trust and ArcelorMittal SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcelorMittal SA ADR and Mesabi Trust 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 Mesabi Trust are associated (or correlated) with ArcelorMittal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ArcelorMittal SA ADR has no effect on the direction of Mesabi Trust i.e., Mesabi Trust and ArcelorMittal go up and down completely randomly.
Pair Corralation between Mesabi Trust and ArcelorMittal
Considering the 90-day investment horizon Mesabi Trust is expected to generate 1.43 times more return on investment than ArcelorMittal. However, Mesabi Trust is 1.43 times more volatile than ArcelorMittal SA ADR. It trades about 0.05 of its potential returns per unit of risk. ArcelorMittal SA ADR is currently generating about 0.0 per unit of risk. If you would invest 1,867 in Mesabi Trust on August 31, 2024 and sell it today you would earn a total of 909.00 from holding Mesabi Trust or generate 48.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesabi Trust vs. ArcelorMittal SA ADR
Performance |
| Timeline |
| Mesabi Trust |
| ArcelorMittal SA ADR |
Mesabi Trust and ArcelorMittal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesabi Trust and ArcelorMittal
The main advantage of trading using opposite Mesabi Trust and ArcelorMittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesabi Trust position performs unexpectedly, ArcelorMittal 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 ArcelorMittal will offset losses from the drop in ArcelorMittal's long position.| Mesabi Trust vs. Olympic Steel | Mesabi Trust vs. Universal Stainless Alloy | Mesabi Trust vs. POSCO Holdings | Mesabi Trust vs. Outokumpu Oyj ADR |
| ArcelorMittal vs. Olympic Steel | ArcelorMittal vs. Ternium SA ADR | ArcelorMittal vs. Gerdau SA ADR | ArcelorMittal 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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