Correlation Between PT Steel and ANGANG STEEL
Can any of the company-specific risk be diversified away by investing in both PT Steel and ANGANG STEEL 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 PT Steel and ANGANG STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Steel Pipe and ANGANG STEEL H , you can compare the effects of market volatilities on PT Steel and ANGANG STEEL 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 PT Steel with a short position of ANGANG STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Steel and ANGANG STEEL.
Diversification Opportunities for PT Steel and ANGANG STEEL
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between S08 and ANGANG is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding PT Steel Pipe and ANGANG STEEL H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGANG STEEL H and PT Steel 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 PT Steel Pipe are associated (or correlated) with ANGANG STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGANG STEEL H has no effect on the direction of PT Steel i.e., PT Steel and ANGANG STEEL go up and down completely randomly.
Pair Corralation between PT Steel and ANGANG STEEL
Assuming the 90 days horizon PT Steel Pipe is expected to generate 2.65 times more return on investment than ANGANG STEEL. However, PT Steel is 2.65 times more volatile than ANGANG STEEL H . It trades about 0.07 of its potential returns per unit of risk. ANGANG STEEL H is currently generating about -0.09 per unit of risk. If you would invest 1.10 in PT Steel Pipe on October 20, 2024 and sell it today you would earn a total of 0.05 from holding PT Steel Pipe or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Steel Pipe vs. ANGANG STEEL H
Performance |
| Timeline |
| PT Steel Pipe |
| ANGANG STEEL H |
PT Steel and ANGANG STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Steel and ANGANG STEEL
The main advantage of trading using opposite PT Steel and ANGANG STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Steel position performs unexpectedly, ANGANG STEEL 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 ANGANG STEEL will offset losses from the drop in ANGANG STEEL's long position.| PT Steel vs. ON SEMICONDUCTOR | PT Steel vs. National Beverage Corp | PT Steel vs. INTER CARS SA | PT Steel vs. Fevertree Drinks PLC |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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