Correlation Between ArcelorMittal and Synalloy
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal and Synalloy 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 Synalloy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ArcelorMittal SA ADR and Synalloy, you can compare the effects of market volatilities on ArcelorMittal and Synalloy 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 Synalloy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and Synalloy.
Diversification Opportunities for ArcelorMittal and Synalloy
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between ArcelorMittal and Synalloy is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA ADR and Synalloy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synalloy 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 ADR are associated (or correlated) with Synalloy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synalloy has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and Synalloy go up and down completely randomly.
Pair Corralation between ArcelorMittal and Synalloy
Allowing for the 90-day total investment horizon ArcelorMittal SA ADR is expected to generate 0.88 times more return on investment than Synalloy. However, ArcelorMittal SA ADR is 1.13 times less risky than Synalloy. It trades about 0.03 of its potential returns per unit of risk. Synalloy is currently generating about 0.02 per unit of risk. If you would invest 2,565 in ArcelorMittal SA ADR on November 9, 2024 and sell it today you would earn a total of 268.00 from holding ArcelorMittal SA ADR or generate 10.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ArcelorMittal SA ADR vs. Synalloy
Performance |
| Timeline |
| ArcelorMittal SA ADR |
| Synalloy |
ArcelorMittal and Synalloy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcelorMittal and Synalloy
The main advantage of trading using opposite ArcelorMittal and Synalloy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal position performs unexpectedly, Synalloy 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 Synalloy will offset losses from the drop in Synalloy's long position.| ArcelorMittal vs. Olympic Steel | ArcelorMittal vs. Ternium SA ADR | ArcelorMittal vs. Gerdau SA ADR | ArcelorMittal vs. POSCO Holdings |
| Synalloy vs. Grupo Simec SAB | Synalloy vs. Mesabi Trust | Synalloy vs. Algoma Steel Group | Synalloy vs. Aperam PK |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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