Correlation Between Turning Point and Arcelormittal
Can any of the company-specific risk be diversified away by investing in both Turning Point 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 Turning Point and Arcelormittal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turning Point Brands and Arcelormittal, you can compare the effects of market volatilities on Turning Point 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 Turning Point with a short position of Arcelormittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turning Point and Arcelormittal.
Diversification Opportunities for Turning Point and Arcelormittal
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Turning and Arcelormittal is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands and Arcelormittal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcelormittal and Turning Point 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 Turning Point Brands 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 has no effect on the direction of Turning Point i.e., Turning Point and Arcelormittal go up and down completely randomly.
Pair Corralation between Turning Point and Arcelormittal
Considering the 90-day investment horizon Turning Point Brands is expected to generate 0.92 times more return on investment than Arcelormittal. However, Turning Point Brands is 1.09 times less risky than Arcelormittal. It trades about 0.12 of its potential returns per unit of risk. Arcelormittal is currently generating about 0.0 per unit of risk. If you would invest 2,090 in Turning Point Brands on August 30, 2024 and sell it today you would earn a total of 4,051 from holding Turning Point Brands or generate 193.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 22.22% |
| Values | Daily Returns |
Turning Point Brands vs. Arcelormittal
Performance |
| Timeline |
| Turning Point Brands |
| Arcelormittal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Turning Point and Arcelormittal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Turning Point and Arcelormittal
The main advantage of trading using opposite Turning Point and Arcelormittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turning Point 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.| Turning Point vs. Universal | Turning Point vs. Imperial Brands PLC | Turning Point vs. British American Tobacco | Turning Point vs. Philip Morris International |
| Arcelormittal vs. Affiliated Managers Group | Arcelormittal vs. Maiden Holdings North | Arcelormittal vs. Credit Enhanced Corts | Arcelormittal vs. Affiliated Managers Group, |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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