Correlation Between ReposiTrak and ArcelorMittal
Can any of the company-specific risk be diversified away by investing in both ReposiTrak 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 ReposiTrak and ArcelorMittal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ReposiTrak and ArcelorMittal SA ADR, you can compare the effects of market volatilities on ReposiTrak 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 ReposiTrak with a short position of ArcelorMittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of ReposiTrak and ArcelorMittal.
Diversification Opportunities for ReposiTrak and ArcelorMittal
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ReposiTrak and ArcelorMittal is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding ReposiTrak 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 ReposiTrak 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 ReposiTrak 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 ReposiTrak i.e., ReposiTrak and ArcelorMittal go up and down completely randomly.
Pair Corralation between ReposiTrak and ArcelorMittal
Given the investment horizon of 90 days ReposiTrak is expected to generate 1.08 times more return on investment than ArcelorMittal. However, ReposiTrak is 1.08 times more volatile than ArcelorMittal SA ADR. It trades about 0.39 of its potential returns per unit of risk. ArcelorMittal SA ADR is currently generating about 0.07 per unit of risk. If you would invest 1,897 in ReposiTrak on September 5, 2024 and sell it today you would earn a total of 420.00 from holding ReposiTrak or generate 22.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ReposiTrak vs. ArcelorMittal SA ADR
Performance |
| Timeline |
| ReposiTrak |
| ArcelorMittal SA ADR |
ReposiTrak and ArcelorMittal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ReposiTrak and ArcelorMittal
The main advantage of trading using opposite ReposiTrak and ArcelorMittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ReposiTrak 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.| ReposiTrak vs. ArcelorMittal SA ADR | ReposiTrak vs. Kaiser Aluminum | ReposiTrak vs. Empresa Distribuidora y | ReposiTrak vs. Maanshan Iron Steel |
| ArcelorMittal vs. Constellium Nv | ArcelorMittal vs. Century Aluminum | ArcelorMittal vs. China Hongqiao Group | ArcelorMittal vs. Kaiser Aluminum |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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