Correlation Between ArcelorMittal and BK Technologies
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal and BK Technologies 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 BK Technologies 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 BK Technologies, you can compare the effects of market volatilities on ArcelorMittal and BK Technologies 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 BK Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and BK Technologies.
Diversification Opportunities for ArcelorMittal and BK Technologies
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between ArcelorMittal and BKTI is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA ADR and BK Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BK Technologies 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 BK Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BK Technologies has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and BK Technologies go up and down completely randomly.
Pair Corralation between ArcelorMittal and BK Technologies
Allowing for the 90-day total investment horizon ArcelorMittal SA ADR is expected to generate 0.49 times more return on investment than BK Technologies. However, ArcelorMittal SA ADR is 2.03 times less risky than BK Technologies. It trades about 0.04 of its potential returns per unit of risk. BK Technologies is currently generating about -0.17 per unit of risk. If you would invest 2,308 in ArcelorMittal SA ADR on October 22, 2024 and sell it today you would earn a total of 18.00 from holding ArcelorMittal SA ADR or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
ArcelorMittal SA ADR vs. BK Technologies
Performance |
| Timeline |
| ArcelorMittal SA ADR |
| BK Technologies |
ArcelorMittal and BK Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcelorMittal and BK Technologies
The main advantage of trading using opposite ArcelorMittal and BK Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal position performs unexpectedly, BK Technologies 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 BK Technologies will offset losses from the drop in BK Technologies' long position.| ArcelorMittal vs. Olympic Steel | ArcelorMittal vs. Ternium SA ADR | ArcelorMittal vs. Gerdau SA ADR | ArcelorMittal vs. POSCO Holdings |
| BK Technologies vs. Frequency Electronics | BK Technologies vs. Actelis Networks | BK Technologies vs. Optical Cable | BK Technologies vs. Baylin Technologies |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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