Correlation Between St Augustine and Algoma Steel
Can any of the company-specific risk be diversified away by investing in both St Augustine and Algoma 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 St Augustine and Algoma Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between St Augustine Gold and Algoma Steel Group, you can compare the effects of market volatilities on St Augustine and Algoma 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 St Augustine with a short position of Algoma Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of St Augustine and Algoma Steel.
Diversification Opportunities for St Augustine and Algoma Steel
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SAU and Algoma is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding St Augustine Gold and Algoma Steel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algoma Steel Group and St Augustine 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 St Augustine Gold are associated (or correlated) with Algoma Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algoma Steel Group has no effect on the direction of St Augustine i.e., St Augustine and Algoma Steel go up and down completely randomly.
Pair Corralation between St Augustine and Algoma Steel
Assuming the 90 days trading horizon St Augustine Gold is expected to generate 2.28 times more return on investment than Algoma Steel. However, St Augustine is 2.28 times more volatile than Algoma Steel Group. It trades about 0.03 of its potential returns per unit of risk. Algoma Steel Group is currently generating about 0.04 per unit of risk. If you would invest 8.00 in St Augustine Gold on September 4, 2024 and sell it today you would earn a total of 0.00 from holding St Augustine Gold or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
St Augustine Gold vs. Algoma Steel Group
Performance |
| Timeline |
| St Augustine Gold |
| Algoma Steel Group |
St Augustine and Algoma Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with St Augustine and Algoma Steel
The main advantage of trading using opposite St Augustine and Algoma Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St Augustine position performs unexpectedly, Algoma 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 Algoma Steel will offset losses from the drop in Algoma Steel's long position.| St Augustine vs. Northcliff Resources | St Augustine vs. Lupaka Gold Corp | St Augustine vs. Angkor Resources Corp | St Augustine vs. Minco Capital Corp |
| Algoma Steel vs. Friedman Industries | Algoma Steel vs. Algoma Steel Group | Algoma Steel vs. Reliance Steel Aluminum | Algoma Steel vs. Universal Stainless Alloy |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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