Correlation Between SCOTT TECHNOLOGY and ArcelorMittal
Can any of the company-specific risk be diversified away by investing in both SCOTT TECHNOLOGY and ArcelorMittal 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 SCOTT TECHNOLOGY and ArcelorMittal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOTT TECHNOLOGY and ArcelorMittal SA, you can compare the effects of market volatilities on SCOTT TECHNOLOGY and ArcelorMittal 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 SCOTT TECHNOLOGY with a short position of ArcelorMittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOTT TECHNOLOGY and ArcelorMittal.
Diversification Opportunities for SCOTT TECHNOLOGY and ArcelorMittal
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between SCOTT and ArcelorMittal is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding SCOTT TECHNOLOGY and ArcelorMittal SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcelorMittal SA and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY are associated (or correlated) with ArcelorMittal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ArcelorMittal SA has no effect on the direction of SCOTT TECHNOLOGY i.e., SCOTT TECHNOLOGY and ArcelorMittal go up and down completely randomly.
Pair Corralation between SCOTT TECHNOLOGY and ArcelorMittal
Assuming the 90 days trading horizon SCOTT TECHNOLOGY is expected to generate 1.73 times more return on investment than ArcelorMittal. However, SCOTT TECHNOLOGY is 1.73 times more volatile than ArcelorMittal SA. It trades about 0.31 of its potential returns per unit of risk. ArcelorMittal SA is currently generating about 0.0 per unit of risk. If you would invest 99.00 in SCOTT TECHNOLOGY on August 29, 2024 and sell it today you would earn a total of 29.00 from holding SCOTT TECHNOLOGY or generate 29.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOTT TECHNOLOGY vs. ArcelorMittal SA
Performance |
| Timeline |
| SCOTT TECHNOLOGY |
| ArcelorMittal SA |
SCOTT TECHNOLOGY and ArcelorMittal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOTT TECHNOLOGY and ArcelorMittal
The main advantage of trading using opposite SCOTT TECHNOLOGY and ArcelorMittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOTT TECHNOLOGY position performs unexpectedly, ArcelorMittal 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 ArcelorMittal will offset losses from the drop in ArcelorMittal's long position.| SCOTT TECHNOLOGY vs. Apple Inc | SCOTT TECHNOLOGY vs. Apple Inc | SCOTT TECHNOLOGY vs. Microsoft | SCOTT TECHNOLOGY vs. Microsoft |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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