Correlation Between SOUTHERN and ArcelorMittal
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By analyzing existing cross correlation between SOUTHERN CALIF EDISON and ArcelorMittal SA ADR, you can compare the effects of market volatilities on SOUTHERN 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 SOUTHERN with a short position of ArcelorMittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOUTHERN and ArcelorMittal.
Diversification Opportunities for SOUTHERN and ArcelorMittal
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between SOUTHERN and ArcelorMittal is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding SOUTHERN CALIF EDISON 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 SOUTHERN 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 SOUTHERN CALIF EDISON 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 SOUTHERN i.e., SOUTHERN and ArcelorMittal go up and down completely randomly.
Pair Corralation between SOUTHERN and ArcelorMittal
Assuming the 90 days trading horizon SOUTHERN CALIF EDISON is expected to generate 0.5 times more return on investment than ArcelorMittal. However, SOUTHERN CALIF EDISON is 2.0 times less risky than ArcelorMittal. It trades about 0.03 of its potential returns per unit of risk. ArcelorMittal SA ADR is currently generating about 0.01 per unit of risk. If you would invest 9,924 in SOUTHERN CALIF EDISON on September 4, 2024 and sell it today you would earn a total of 393.00 from holding SOUTHERN CALIF EDISON or generate 3.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 83.0% |
| Values | Daily Returns |
SOUTHERN CALIF EDISON vs. ArcelorMittal SA ADR
Performance |
| Timeline |
| SOUTHERN CALIF EDISON |
| ArcelorMittal SA ADR |
SOUTHERN and ArcelorMittal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOUTHERN and ArcelorMittal
The main advantage of trading using opposite SOUTHERN and ArcelorMittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOUTHERN 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.| SOUTHERN vs. ArcelorMittal SA ADR | SOUTHERN vs. Emerson Radio | SOUTHERN vs. Mangazeya Mining | SOUTHERN vs. Summit Materials |
| ArcelorMittal vs. Olympic Steel | ArcelorMittal vs. Ternium SA ADR | ArcelorMittal vs. Gerdau SA ADR | ArcelorMittal vs. POSCO Holdings |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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