Correlation Between Zhibao Technology and Algoma Steel
Can any of the company-specific risk be diversified away by investing in both Zhibao Technology and Algoma Steel 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 Zhibao Technology and Algoma Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zhibao Technology Class and Algoma Steel Group, you can compare the effects of market volatilities on Zhibao Technology and Algoma Steel 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 Zhibao Technology with a short position of Algoma Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhibao Technology and Algoma Steel.
Diversification Opportunities for Zhibao Technology and Algoma Steel
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zhibao and Algoma is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Zhibao Technology Class and Algoma Steel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algoma Steel Group and Zhibao Technology 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 Zhibao Technology Class are associated (or correlated) with Algoma Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algoma Steel Group has no effect on the direction of Zhibao Technology i.e., Zhibao Technology and Algoma Steel go up and down completely randomly.
Pair Corralation between Zhibao Technology and Algoma Steel
Given the investment horizon of 90 days Zhibao Technology Class is expected to under-perform the Algoma Steel. In addition to that, Zhibao Technology is 3.42 times more volatile than Algoma Steel Group. It trades about -0.33 of its total potential returns per unit of risk. Algoma Steel Group is currently generating about -0.34 per unit of volatility. If you would invest 1,165 in Algoma Steel Group on September 12, 2024 and sell it today you would lose (150.00) from holding Algoma Steel Group or give up 12.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Zhibao Technology Class vs. Algoma Steel Group
Performance |
| Timeline |
| Zhibao Technology Class |
| Algoma Steel Group |
Zhibao Technology and Algoma Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhibao Technology and Algoma Steel
The main advantage of trading using opposite Zhibao Technology and Algoma Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhibao Technology position performs unexpectedly, Algoma Steel 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 Algoma Steel will offset losses from the drop in Algoma Steel's long position.| Zhibao Technology vs. eHealth | Zhibao Technology vs. Erie Indemnity | Zhibao Technology vs. Arthur J Gallagher | Zhibao Technology vs. Aon PLC |
| Algoma Steel vs. Friedman Industries | Algoma Steel vs. ArcelorMittal SA | Algoma Steel vs. Aperam PK | Algoma Steel vs. Acerinox SA ADR |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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