Correlation Between SCHNITZER STEEL and ArcelorMittal
Can any of the company-specific risk be diversified away by investing in both SCHNITZER STEEL 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 SCHNITZER STEEL and ArcelorMittal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCHNITZER STEEL INDUSTRIES and ArcelorMittal SA ADR, you can compare the effects of market volatilities on SCHNITZER STEEL 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 SCHNITZER STEEL with a short position of ArcelorMittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCHNITZER STEEL and ArcelorMittal.
Diversification Opportunities for SCHNITZER STEEL and ArcelorMittal
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SCHNITZER and ArcelorMittal is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding SCHNITZER STEEL INDUSTRIES and ArcelorMittal SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcelorMittal SA ADR and SCHNITZER 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 SCHNITZER STEEL INDUSTRIES 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 ADR has no effect on the direction of SCHNITZER STEEL i.e., SCHNITZER STEEL and ArcelorMittal go up and down completely randomly.
Pair Corralation between SCHNITZER STEEL and ArcelorMittal
If you would invest 2,328 in ArcelorMittal SA ADR on August 24, 2024 and sell it today you would earn a total of 180.00 from holding ArcelorMittal SA ADR or generate 7.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
SCHNITZER STEEL INDUSTRIES vs. ArcelorMittal SA ADR
Performance |
| Timeline |
| SCHNITZER STEEL INDU |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ArcelorMittal SA ADR |
SCHNITZER STEEL and ArcelorMittal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCHNITZER STEEL and ArcelorMittal
The main advantage of trading using opposite SCHNITZER STEEL and ArcelorMittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCHNITZER STEEL 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.| SCHNITZER STEEL vs. Olympic Steel | SCHNITZER STEEL vs. Universal Stainless Alloy | SCHNITZER STEEL vs. Outokumpu Oyj ADR | SCHNITZER STEEL vs. Usinas Siderurgicas de |
| ArcelorMittal vs. Cleveland Cliffs | ArcelorMittal vs. United States Steel | ArcelorMittal vs. Reliance Steel Aluminum | ArcelorMittal vs. Nucor Corp |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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