Correlation Between ArcelorMittal and Fomento De
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal and Fomento De 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 Fomento De into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ArcelorMittal SA and Fomento de Construcciones, you can compare the effects of market volatilities on ArcelorMittal and Fomento De 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 Fomento De. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and Fomento De.
Diversification Opportunities for ArcelorMittal and Fomento De
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ArcelorMittal and Fomento is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA and Fomento de Construcciones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fomento de Construcciones 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 are associated (or correlated) with Fomento De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fomento de Construcciones has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and Fomento De go up and down completely randomly.
Pair Corralation between ArcelorMittal and Fomento De
Assuming the 90 days trading horizon ArcelorMittal is expected to generate 142.5 times less return on investment than Fomento De. But when comparing it to its historical volatility, ArcelorMittal SA is 1.18 times less risky than Fomento De. It trades about 0.0 of its potential returns per unit of risk. Fomento de Construcciones is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 619.00 in Fomento de Construcciones on August 29, 2024 and sell it today you would earn a total of 293.00 from holding Fomento de Construcciones or generate 47.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ArcelorMittal SA vs. Fomento de Construcciones
Performance |
| Timeline |
| ArcelorMittal SA |
| Fomento de Construcciones |
ArcelorMittal and Fomento De Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcelorMittal and Fomento De
The main advantage of trading using opposite ArcelorMittal and Fomento De positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal position performs unexpectedly, Fomento De 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 Fomento De will offset losses from the drop in Fomento De's long position.| ArcelorMittal vs. Acerinox | ArcelorMittal vs. ACS Actividades de | ArcelorMittal vs. International Consolidated Airlines | ArcelorMittal vs. Mapfre |
| Fomento De vs. Ferrovial | Fomento De vs. ACS Actividades de | Fomento De vs. Acciona | Fomento De vs. Indra A |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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