Correlation Between AK Steel and Anadarko Petroleum
Can any of the company-specific risk be diversified away by investing in both AK Steel and Anadarko Petroleum 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 AK Steel and Anadarko Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AK Steel Holding and Anadarko Petroleum, you can compare the effects of market volatilities on AK Steel and Anadarko Petroleum 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 AK Steel with a short position of Anadarko Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of AK Steel and Anadarko Petroleum.
Diversification Opportunities for AK Steel and Anadarko Petroleum
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AKS and Anadarko is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AK Steel Holding and Anadarko Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anadarko Petroleum and AK Steel 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 AK Steel Holding are associated (or correlated) with Anadarko Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anadarko Petroleum has no effect on the direction of AK Steel i.e., AK Steel and Anadarko Petroleum go up and down completely randomly.
Pair Corralation between AK Steel and Anadarko Petroleum
If you would invest (100.00) in Anadarko Petroleum on January 31, 2024 and sell it today you would earn a total of 100.00 from holding Anadarko Petroleum or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
AK Steel Holding vs. Anadarko Petroleum
Performance |
Timeline |
AK Steel Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Anadarko Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
AK Steel and Anadarko Petroleum Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AK Steel and Anadarko Petroleum
The main advantage of trading using opposite AK Steel and Anadarko Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AK Steel position performs unexpectedly, Anadarko Petroleum 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 Anadarko Petroleum will offset losses from the drop in Anadarko Petroleum's long position.AK Steel vs. SEI Investments | AK Steel vs. Willamette Valley Vineyards | AK Steel vs. Anheuser Busch Inbev | AK Steel vs. US Global Investors |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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