Correlation Between Steel Authority and AGI Greenpac
Can any of the company-specific risk be diversified away by investing in both Steel Authority and AGI Greenpac 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 Steel Authority and AGI Greenpac into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Authority of and AGI Greenpac Limited, you can compare the effects of market volatilities on Steel Authority and AGI Greenpac 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 Steel Authority with a short position of AGI Greenpac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Authority and AGI Greenpac.
Diversification Opportunities for Steel Authority and AGI Greenpac
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Steel and AGI is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Steel Authority of and AGI Greenpac Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGI Greenpac Limited and Steel Authority 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 Steel Authority of are associated (or correlated) with AGI Greenpac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGI Greenpac Limited has no effect on the direction of Steel Authority i.e., Steel Authority and AGI Greenpac go up and down completely randomly.
Pair Corralation between Steel Authority and AGI Greenpac
Assuming the 90 days trading horizon Steel Authority of is expected to under-perform the AGI Greenpac. But the stock apears to be less risky and, when comparing its historical volatility, Steel Authority of is 1.38 times less risky than AGI Greenpac. The stock trades about -0.08 of its potential returns per unit of risk. The AGI Greenpac Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 76,598 in AGI Greenpac Limited on October 21, 2024 and sell it today you would earn a total of 22,457 from holding AGI Greenpac Limited or generate 29.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steel Authority of vs. AGI Greenpac Limited
Performance |
| Timeline |
| Steel Authority |
| AGI Greenpac Limited |
Steel Authority and AGI Greenpac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Authority and AGI Greenpac
The main advantage of trading using opposite Steel Authority and AGI Greenpac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Authority position performs unexpectedly, AGI Greenpac 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 AGI Greenpac will offset losses from the drop in AGI Greenpac's long position.| Steel Authority vs. Dhunseri Investments Limited | Steel Authority vs. Popular Vehicles and | Steel Authority vs. AUTHUM INVESTMENT INFRASTRUCTU | Steel Authority vs. Landmark Cars 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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