Correlation Between STGEORGE MINING and ANGANG STEEL
Can any of the company-specific risk be diversified away by investing in both STGEORGE MINING 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 STGEORGE MINING and ANGANG STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STGEORGE MINING LTD and ANGANG STEEL H , you can compare the effects of market volatilities on STGEORGE MINING 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 STGEORGE MINING with a short position of ANGANG STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of STGEORGE MINING and ANGANG STEEL.
Diversification Opportunities for STGEORGE MINING and ANGANG STEEL
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STGEORGE and ANGANG is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding STGEORGE MINING LTD 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 STGEORGE MINING 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 STGEORGE MINING LTD 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 STGEORGE MINING i.e., STGEORGE MINING and ANGANG STEEL go up and down completely randomly.
Pair Corralation between STGEORGE MINING and ANGANG STEEL
Assuming the 90 days horizon STGEORGE MINING LTD is expected to generate 3.73 times more return on investment than ANGANG STEEL. However, STGEORGE MINING is 3.73 times more volatile than ANGANG STEEL H . It trades about 0.06 of its potential returns per unit of risk. ANGANG STEEL H is currently generating about 0.07 per unit of risk. If you would invest 1.20 in STGEORGE MINING LTD on December 11, 2024 and sell it today you would lose (0.35) from holding STGEORGE MINING LTD or give up 29.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STGEORGE MINING LTD vs. ANGANG STEEL H
Performance |
| Timeline |
| STGEORGE MINING LTD |
| ANGANG STEEL H |
STGEORGE MINING and ANGANG STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STGEORGE MINING and ANGANG STEEL
The main advantage of trading using opposite STGEORGE MINING and ANGANG STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STGEORGE MINING 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.| STGEORGE MINING vs. BHP Group Limited | ||
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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