Correlation Between ArcelorMittal and Nampak
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal and Nampak 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 Nampak 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 Nampak, you can compare the effects of market volatilities on ArcelorMittal and Nampak 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 Nampak. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and Nampak.
Diversification Opportunities for ArcelorMittal and Nampak
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ArcelorMittal and Nampak is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA ADR and Nampak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nampak 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 Nampak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nampak has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and Nampak go up and down completely randomly.
Pair Corralation between ArcelorMittal and Nampak
If you would invest 1,250 in Nampak on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Nampak or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 2.33% |
| Values | Daily Returns |
ArcelorMittal SA ADR vs. Nampak
Performance |
| Timeline |
| ArcelorMittal SA ADR |
| Nampak |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ArcelorMittal and Nampak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcelorMittal and Nampak
The main advantage of trading using opposite ArcelorMittal and Nampak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal position performs unexpectedly, Nampak 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 Nampak will offset losses from the drop in Nampak's long position.| ArcelorMittal vs. Olympic Steel | ArcelorMittal vs. Ternium SA ADR | ArcelorMittal vs. Gerdau SA ADR | ArcelorMittal vs. POSCO Holdings |
| Nampak vs. Arq Inc | Nampak vs. ArcelorMittal SA ADR | Nampak vs. Sanyo Special Steel | Nampak vs. Olympic Steel |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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