Correlation Between ArcelorMittal and Turning Point
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal and Turning Point 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 Turning Point 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 Turning Point Brands, you can compare the effects of market volatilities on ArcelorMittal and Turning Point 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 Turning Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and Turning Point.
Diversification Opportunities for ArcelorMittal and Turning Point
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ArcelorMittal and Turning is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA ADR and Turning Point Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turning Point Brands 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 Turning Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turning Point Brands has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and Turning Point go up and down completely randomly.
Pair Corralation between ArcelorMittal and Turning Point
Allowing for the 90-day total investment horizon ArcelorMittal is expected to generate 19.92 times less return on investment than Turning Point. But when comparing it to its historical volatility, ArcelorMittal SA ADR is 1.09 times less risky than Turning Point. It trades about 0.03 of its potential returns per unit of risk. Turning Point Brands is currently generating about 0.55 of returns per unit of risk over similar time horizon. If you would invest 4,663 in Turning Point Brands on August 31, 2024 and sell it today you would earn a total of 1,478 from holding Turning Point Brands or generate 31.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ArcelorMittal SA ADR vs. Turning Point Brands
Performance |
| Timeline |
| ArcelorMittal SA ADR |
| Turning Point Brands |
ArcelorMittal and Turning Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcelorMittal and Turning Point
The main advantage of trading using opposite ArcelorMittal and Turning Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal position performs unexpectedly, Turning Point 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 Turning Point will offset losses from the drop in Turning Point's long position.| ArcelorMittal vs. Olympic Steel | ArcelorMittal vs. Ternium SA ADR | ArcelorMittal vs. Gerdau SA ADR | ArcelorMittal vs. POSCO Holdings |
| Turning Point vs. Universal | Turning Point vs. Imperial Brands PLC | Turning Point vs. British American Tobacco | Turning Point vs. Philip Morris International |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Positions Ratings 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 | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |