Correlation Between ArcelorMittal and Natures Miracle
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal and Natures Miracle 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 Natures Miracle 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 Natures Miracle Holding, you can compare the effects of market volatilities on ArcelorMittal and Natures Miracle 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 Natures Miracle. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and Natures Miracle.
Diversification Opportunities for ArcelorMittal and Natures Miracle
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ArcelorMittal and Natures is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA ADR and Natures Miracle Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natures Miracle Holding 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 Natures Miracle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natures Miracle Holding has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and Natures Miracle go up and down completely randomly.
Pair Corralation between ArcelorMittal and Natures Miracle
Allowing for the 90-day total investment horizon ArcelorMittal is expected to generate 24.81 times less return on investment than Natures Miracle. But when comparing it to its historical volatility, ArcelorMittal SA ADR is 22.49 times less risky than Natures Miracle. It trades about 0.13 of its potential returns per unit of risk. Natures Miracle Holding is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1.69 in Natures Miracle Holding on September 12, 2024 and sell it today you would lose (0.59) from holding Natures Miracle Holding or give up 34.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 54.69% |
| Values | Daily Returns |
ArcelorMittal SA ADR vs. Natures Miracle Holding
Performance |
| Timeline |
| ArcelorMittal SA ADR |
| Natures Miracle Holding |
ArcelorMittal and Natures Miracle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcelorMittal and Natures Miracle
The main advantage of trading using opposite ArcelorMittal and Natures Miracle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal position performs unexpectedly, Natures Miracle 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 Natures Miracle will offset losses from the drop in Natures Miracle's long position.| ArcelorMittal vs. Fortitude Gold Corp | ArcelorMittal vs. New Gold | ArcelorMittal vs. Galiano Gold | ArcelorMittal vs. GoldMining |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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