Correlation Between Park Ohio and Maanshan Iron
Can any of the company-specific risk be diversified away by investing in both Park Ohio and Maanshan Iron 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 Park Ohio and Maanshan Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Park Ohio Holdings and Maanshan Iron Steel, you can compare the effects of market volatilities on Park Ohio and Maanshan Iron 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 Park Ohio with a short position of Maanshan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Ohio and Maanshan Iron.
Diversification Opportunities for Park Ohio and Maanshan Iron
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Park and Maanshan is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Park Ohio Holdings and Maanshan Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maanshan Iron Steel and Park Ohio 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 Park Ohio Holdings are associated (or correlated) with Maanshan Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maanshan Iron Steel has no effect on the direction of Park Ohio i.e., Park Ohio and Maanshan Iron go up and down completely randomly.
Pair Corralation between Park Ohio and Maanshan Iron
If you would invest 2,899 in Park Ohio Holdings on August 27, 2024 and sell it today you would earn a total of 405.00 from holding Park Ohio Holdings or generate 13.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park Ohio Holdings vs. Maanshan Iron Steel
Performance |
| Timeline |
| Park Ohio Holdings |
| Maanshan Iron Steel |
Park Ohio and Maanshan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Ohio and Maanshan Iron
The main advantage of trading using opposite Park Ohio and Maanshan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Ohio position performs unexpectedly, Maanshan Iron 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 Maanshan Iron will offset losses from the drop in Maanshan Iron's long position.| Park Ohio vs. Aquagold International | Park Ohio vs. Morningstar Unconstrained Allocation | Park Ohio vs. High Yield Municipal Fund | Park Ohio vs. Thrivent High Yield |
| Maanshan Iron vs. Olympic Steel | Maanshan Iron vs. Mesabi Trust | Maanshan Iron vs. Universal Stainless Alloy | Maanshan Iron vs. POSCO Holdings |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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