Correlation Between United States and Agrometal SAI
Can any of the company-specific risk be diversified away by investing in both United States and Agrometal SAI 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 United States and Agrometal SAI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and Agrometal SAI, you can compare the effects of market volatilities on United States and Agrometal SAI 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 United States with a short position of Agrometal SAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Agrometal SAI.
Diversification Opportunities for United States and Agrometal SAI
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Agrometal is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Agrometal SAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agrometal SAI and United States 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 United States Steel are associated (or correlated) with Agrometal SAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agrometal SAI has no effect on the direction of United States i.e., United States and Agrometal SAI go up and down completely randomly.
Pair Corralation between United States and Agrometal SAI
Given the investment horizon of 90 days United States Steel is expected to generate 0.85 times more return on investment than Agrometal SAI. However, United States Steel is 1.18 times less risky than Agrometal SAI. It trades about 0.19 of its potential returns per unit of risk. Agrometal SAI is currently generating about -0.06 per unit of risk. If you would invest 1,287,500 in United States Steel on November 2, 2024 and sell it today you would earn a total of 145,000 from holding United States Steel or generate 11.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Steel vs. Agrometal SAI
Performance |
| Timeline |
| United States Steel |
| Agrometal SAI |
United States and Agrometal SAI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Agrometal SAI
The main advantage of trading using opposite United States and Agrometal SAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, Agrometal SAI 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 Agrometal SAI will offset losses from the drop in Agrometal SAI's long position.| United States vs. Boldt SA | United States vs. Agrometal SAI | United States vs. Capex SA | United States vs. Pfizer Inc |
| Agrometal SAI vs. Harmony Gold Mining | Agrometal SAI vs. Compania de Transporte | Agrometal SAI vs. Transportadora de Gas |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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