Correlation Between ArcelorMittal and Fastned BV
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal and Fastned BV 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 Fastned BV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ArcelorMittal SA and Fastned BV, you can compare the effects of market volatilities on ArcelorMittal and Fastned BV 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 Fastned BV. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and Fastned BV.
Diversification Opportunities for ArcelorMittal and Fastned BV
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ArcelorMittal and Fastned is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA and Fastned BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastned BV 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 Fastned BV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastned BV has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and Fastned BV go up and down completely randomly.
Pair Corralation between ArcelorMittal and Fastned BV
Assuming the 90 days horizon ArcelorMittal SA is expected to generate 0.77 times more return on investment than Fastned BV. However, ArcelorMittal SA is 1.3 times less risky than Fastned BV. It trades about -0.01 of its potential returns per unit of risk. Fastned BV is currently generating about -0.04 per unit of risk. If you would invest 2,741 in ArcelorMittal SA on October 24, 2024 and sell it today you would lose (442.00) from holding ArcelorMittal SA or give up 16.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ArcelorMittal SA vs. Fastned BV
Performance |
| Timeline |
| ArcelorMittal SA |
| Fastned BV |
ArcelorMittal and Fastned BV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcelorMittal and Fastned BV
The main advantage of trading using opposite ArcelorMittal and Fastned BV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal position performs unexpectedly, Fastned BV 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 Fastned BV will offset losses from the drop in Fastned BV's long position.| ArcelorMittal vs. ING Groep NV | ArcelorMittal vs. Aegon NV | ArcelorMittal vs. Compagnie de Saint Gobain | ArcelorMittal vs. Koninklijke Philips NV |
| Fastned BV vs. Alfen Beheer BV | Fastned BV vs. BE Semiconductor Industries | Fastned BV vs. Just Eat Takeaway | Fastned BV vs. PostNL 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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