Correlation Between ArcelorMittal and CTP NV
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal and CTP NV 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 ArcelorMittal and CTP NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ArcelorMittal SA and CTP NV, you can compare the effects of market volatilities on ArcelorMittal and CTP NV 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 ArcelorMittal with a short position of CTP NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and CTP NV.
Diversification Opportunities for ArcelorMittal and CTP NV
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ArcelorMittal and CTP is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA and CTP NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTP NV and ArcelorMittal 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 ArcelorMittal SA are associated (or correlated) with CTP NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTP NV has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and CTP NV go up and down completely randomly.
Pair Corralation between ArcelorMittal and CTP NV
Assuming the 90 days horizon ArcelorMittal SA is expected to generate 1.45 times more return on investment than CTP NV. However, ArcelorMittal is 1.45 times more volatile than CTP NV. It trades about 0.03 of its potential returns per unit of risk. CTP NV is currently generating about -0.13 per unit of risk. If you would invest 2,331 in ArcelorMittal SA on August 31, 2024 and sell it today you would earn a total of 31.00 from holding ArcelorMittal SA or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.78% |
| Values | Daily Returns |
ArcelorMittal SA vs. CTP NV
Performance |
| Timeline |
| ArcelorMittal SA |
| CTP NV |
ArcelorMittal and CTP NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcelorMittal and CTP NV
The main advantage of trading using opposite ArcelorMittal and CTP NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal position performs unexpectedly, CTP NV 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 CTP NV will offset losses from the drop in CTP NV's long position.| ArcelorMittal vs. ING Groep NV | ArcelorMittal vs. Aegon NV | ArcelorMittal vs. Compagnie de Saint Gobain | ArcelorMittal vs. Koninklijke Philips NV |
| CTP NV vs. Warehouses de Pauw | CTP NV vs. VGP NV | CTP NV vs. Eurocommercial Properties NV | CTP NV vs. Koninklijke Heijmans NV |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| CEOs Directory Screen CEOs from public companies around the world |