Correlation Between Russel Metals and ATS P
Can any of the company-specific risk be diversified away by investing in both Russel Metals and ATS P 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 Russel Metals and ATS P into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Russel Metals and ATS P, you can compare the effects of market volatilities on Russel Metals and ATS P 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 Russel Metals with a short position of ATS P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Russel Metals and ATS P.
Diversification Opportunities for Russel Metals and ATS P
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Russel and ATS is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Russel Metals and ATS P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATS P and Russel Metals 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 Russel Metals are associated (or correlated) with ATS P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATS P has no effect on the direction of Russel Metals i.e., Russel Metals and ATS P go up and down completely randomly.
Pair Corralation between Russel Metals and ATS P
Assuming the 90 days trading horizon Russel Metals is expected to generate 0.68 times more return on investment than ATS P. However, Russel Metals is 1.47 times less risky than ATS P. It trades about 0.04 of its potential returns per unit of risk. ATS P is currently generating about -0.02 per unit of risk. If you would invest 3,921 in Russel Metals on December 11, 2024 and sell it today you would earn a total of 86.00 from holding Russel Metals or generate 2.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Russel Metals vs. ATS P
Performance |
| Timeline |
| Russel Metals |
| ATS P |
Russel Metals and ATS P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Russel Metals and ATS P
The main advantage of trading using opposite Russel Metals and ATS P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Russel Metals position performs unexpectedly, ATS P 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 ATS P will offset losses from the drop in ATS P's long position.| Russel Metals vs. Finning International | Russel Metals vs. Transcontinental | Russel Metals vs. Toromont Industries | Russel Metals vs. IGM Financial |
| ATS P vs. Trisura Group | ATS P vs. Brookfield | ATS P vs. Storage Vault Canada | ATS P vs. Brookfield Asset Management |
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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