Correlation Between ArcelorMittal and HUTCHMED DRC
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal and HUTCHMED DRC 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 HUTCHMED DRC 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 HUTCHMED DRC, you can compare the effects of market volatilities on ArcelorMittal and HUTCHMED DRC 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 HUTCHMED DRC. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and HUTCHMED DRC.
Diversification Opportunities for ArcelorMittal and HUTCHMED DRC
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ArcelorMittal and HUTCHMED is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA ADR and HUTCHMED DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUTCHMED DRC 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 HUTCHMED DRC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUTCHMED DRC has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and HUTCHMED DRC go up and down completely randomly.
Pair Corralation between ArcelorMittal and HUTCHMED DRC
Allowing for the 90-day total investment horizon ArcelorMittal SA ADR is expected to generate 0.7 times more return on investment than HUTCHMED DRC. However, ArcelorMittal SA ADR is 1.44 times less risky than HUTCHMED DRC. It trades about 0.02 of its potential returns per unit of risk. HUTCHMED DRC is currently generating about -0.27 per unit of risk. If you would invest 2,470 in ArcelorMittal SA ADR on August 28, 2024 and sell it today you would earn a total of 16.00 from holding ArcelorMittal SA ADR or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ArcelorMittal SA ADR vs. HUTCHMED DRC
Performance |
| Timeline |
| ArcelorMittal SA ADR |
| HUTCHMED DRC |
ArcelorMittal and HUTCHMED DRC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcelorMittal and HUTCHMED DRC
The main advantage of trading using opposite ArcelorMittal and HUTCHMED DRC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal position performs unexpectedly, HUTCHMED DRC 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 HUTCHMED DRC will offset losses from the drop in HUTCHMED DRC's long position.| ArcelorMittal vs. Olympic Steel | ArcelorMittal vs. Ternium SA ADR | ArcelorMittal vs. Gerdau SA ADR | ArcelorMittal vs. POSCO Holdings |
| HUTCHMED DRC vs. Capricor Therapeutics | HUTCHMED DRC vs. Soleno Therapeutics | HUTCHMED DRC vs. Bio Path Holdings | HUTCHMED DRC vs. Moleculin Biotech |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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