Correlation Between ArcelorMittal and Celanese
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal and Celanese 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 Celanese 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 Celanese, you can compare the effects of market volatilities on ArcelorMittal and Celanese 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 Celanese. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and Celanese.
Diversification Opportunities for ArcelorMittal and Celanese
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ArcelorMittal and Celanese is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA ADR and Celanese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celanese 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 Celanese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celanese has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and Celanese go up and down completely randomly.
Pair Corralation between ArcelorMittal and Celanese
Allowing for the 90-day total investment horizon ArcelorMittal is expected to generate 15.76 times less return on investment than Celanese. But when comparing it to its historical volatility, ArcelorMittal SA ADR is 1.55 times less risky than Celanese. It trades about 0.02 of its potential returns per unit of risk. Celanese is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 6,703 in Celanese on October 20, 2024 and sell it today you would earn a total of 558.00 from holding Celanese or generate 8.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ArcelorMittal SA ADR vs. Celanese
Performance |
| Timeline |
| ArcelorMittal SA ADR |
| Celanese |
ArcelorMittal and Celanese Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcelorMittal and Celanese
The main advantage of trading using opposite ArcelorMittal and Celanese positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal position performs unexpectedly, Celanese 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 Celanese will offset losses from the drop in Celanese's long position.| ArcelorMittal vs. Olympic Steel | ArcelorMittal vs. Ternium SA ADR | ArcelorMittal vs. Gerdau SA ADR | ArcelorMittal vs. POSCO Holdings |
| Celanese vs. Tronox Holdings PLC | Celanese vs. Green Plains Renewable | Celanese vs. Lsb Industries | Celanese vs. Valhi Inc |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |