Correlation Between Western Acquisition and Mechel OAO
Can any of the company-specific risk be diversified away by investing in both Western Acquisition and Mechel OAO 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 Western Acquisition and Mechel OAO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Acquisition Ventures and Mechel OAO, you can compare the effects of market volatilities on Western Acquisition and Mechel OAO 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 Western Acquisition with a short position of Mechel OAO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Acquisition and Mechel OAO.
Diversification Opportunities for Western Acquisition and Mechel OAO
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and Mechel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Western Acquisition Ventures and Mechel OAO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mechel OAO and Western Acquisition 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 Western Acquisition Ventures are associated (or correlated) with Mechel OAO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mechel OAO has no effect on the direction of Western Acquisition i.e., Western Acquisition and Mechel OAO go up and down completely randomly.
Pair Corralation between Western Acquisition and Mechel OAO
If you would invest 1,087 in Western Acquisition Ventures on November 3, 2024 and sell it today you would earn a total of 313.00 from holding Western Acquisition Ventures or generate 28.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Western Acquisition Ventures vs. Mechel OAO
Performance |
| Timeline |
| Western Acquisition |
| Mechel OAO |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Western Acquisition and Mechel OAO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Acquisition and Mechel OAO
The main advantage of trading using opposite Western Acquisition and Mechel OAO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Acquisition position performs unexpectedly, Mechel OAO 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 Mechel OAO will offset losses from the drop in Mechel OAO's long position.The idea behind Western Acquisition Ventures and Mechel OAO pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Mechel OAO vs. Triton International Limited | Mechel OAO vs. Grocery Outlet Holding | Mechel OAO vs. Global Net Lease | Mechel OAO vs. Lianhua Supermarket 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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