Correlation Between ArcelorMittal and Pintec Technology
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal and Pintec Technology 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 Pintec Technology 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 Pintec Technology Holdings, you can compare the effects of market volatilities on ArcelorMittal and Pintec Technology 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 Pintec Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and Pintec Technology.
Diversification Opportunities for ArcelorMittal and Pintec Technology
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ArcelorMittal and Pintec is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA ADR and Pintec Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pintec Technology 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 Pintec Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pintec Technology has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and Pintec Technology go up and down completely randomly.
Pair Corralation between ArcelorMittal and Pintec Technology
Allowing for the 90-day total investment horizon ArcelorMittal SA ADR is expected to generate 0.45 times more return on investment than Pintec Technology. However, ArcelorMittal SA ADR is 2.23 times less risky than Pintec Technology. It trades about 0.13 of its potential returns per unit of risk. Pintec Technology Holdings is currently generating about -0.01 per unit of risk. If you would invest 2,217 in ArcelorMittal SA ADR on September 12, 2024 and sell it today you would earn a total of 357.00 from holding ArcelorMittal SA ADR or generate 16.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ArcelorMittal SA ADR vs. Pintec Technology Holdings
Performance |
| Timeline |
| ArcelorMittal SA ADR |
| Pintec Technology |
ArcelorMittal and Pintec Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcelorMittal and Pintec Technology
The main advantage of trading using opposite ArcelorMittal and Pintec Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal position performs unexpectedly, Pintec Technology 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 Pintec Technology will offset losses from the drop in Pintec Technology'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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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