Correlation Between ArcelorMittal and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal and Canlan Ice 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 Canlan Ice 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 Canlan Ice Sports, you can compare the effects of market volatilities on ArcelorMittal and Canlan Ice 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 Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and Canlan Ice.
Diversification Opportunities for ArcelorMittal and Canlan Ice
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ArcelorMittal and Canlan is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA ADR and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports 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 Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and Canlan Ice go up and down completely randomly.
Pair Corralation between ArcelorMittal and Canlan Ice
Allowing for the 90-day total investment horizon ArcelorMittal SA ADR is expected to generate 16.97 times more return on investment than Canlan Ice. However, ArcelorMittal is 16.97 times more volatile than Canlan Ice Sports. It trades about 0.01 of its potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.14 per unit of risk. If you would invest 2,522 in ArcelorMittal SA ADR on September 4, 2024 and sell it today you would earn a total of 2.00 from holding ArcelorMittal SA ADR or generate 0.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ArcelorMittal SA ADR vs. Canlan Ice Sports
Performance |
| Timeline |
| ArcelorMittal SA ADR |
| Canlan Ice Sports |
ArcelorMittal and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcelorMittal and Canlan Ice
The main advantage of trading using opposite ArcelorMittal and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.| ArcelorMittal vs. Olympic Steel | ArcelorMittal vs. Ternium SA ADR | ArcelorMittal vs. Gerdau SA ADR | ArcelorMittal vs. POSCO Holdings |
| Canlan Ice vs. Comstock Holding Companies | Canlan Ice vs. Artisan Partners Asset | Canlan Ice vs. LithiumBank Resources Corp | Canlan Ice vs. PennantPark Investment |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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