Correlation Between Merlin Properties and ArcelorMittal
Can any of the company-specific risk be diversified away by investing in both Merlin Properties and ArcelorMittal 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 Merlin Properties and ArcelorMittal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merlin Properties SOCIMI and ArcelorMittal SA, you can compare the effects of market volatilities on Merlin Properties 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 Merlin Properties with a short position of ArcelorMittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merlin Properties and ArcelorMittal.
Diversification Opportunities for Merlin Properties and ArcelorMittal
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Merlin and ArcelorMittal is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Merlin Properties SOCIMI and ArcelorMittal SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcelorMittal SA and Merlin Properties 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 Merlin Properties SOCIMI 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 has no effect on the direction of Merlin Properties i.e., Merlin Properties and ArcelorMittal go up and down completely randomly.
Pair Corralation between Merlin Properties and ArcelorMittal
Assuming the 90 days trading horizon Merlin Properties SOCIMI is expected to generate 0.49 times more return on investment than ArcelorMittal. However, Merlin Properties SOCIMI is 2.05 times less risky than ArcelorMittal. It trades about 0.31 of its potential returns per unit of risk. ArcelorMittal SA is currently generating about 0.12 per unit of risk. If you would invest 971.00 in Merlin Properties SOCIMI on April 24, 2025 and sell it today you would earn a total of 195.00 from holding Merlin Properties SOCIMI or generate 20.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.44% |
Values | Daily Returns |
Merlin Properties SOCIMI vs. ArcelorMittal SA
Performance |
Timeline |
Merlin Properties SOCIMI |
ArcelorMittal SA |
Merlin Properties and ArcelorMittal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Merlin Properties and ArcelorMittal
The main advantage of trading using opposite Merlin Properties and ArcelorMittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merlin Properties 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.Merlin Properties vs. Bankinter | Merlin Properties vs. Millenium Hotels Real | Merlin Properties vs. Neinor Homes SLU | Merlin Properties vs. Media Investment Optimization |
ArcelorMittal vs. Acerinox | ArcelorMittal vs. ACS Actividades de | ArcelorMittal vs. International Consolidated Airlines | ArcelorMittal vs. Mapfre |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |