Correlation Between ArcelorMittal and Aperam SA
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal and Aperam SA 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 ArcelorMittal and Aperam SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ArcelorMittal SA and Aperam SA, you can compare the effects of market volatilities on ArcelorMittal and Aperam SA 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 ArcelorMittal with a short position of Aperam SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and Aperam SA.
Diversification Opportunities for ArcelorMittal and Aperam SA
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ArcelorMittal and Aperam is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA and Aperam SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aperam SA and ArcelorMittal 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 ArcelorMittal SA are associated (or correlated) with Aperam SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aperam SA has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and Aperam SA go up and down completely randomly.
Pair Corralation between ArcelorMittal and Aperam SA
Assuming the 90 days horizon ArcelorMittal SA is expected to generate 1.0 times more return on investment than Aperam SA. However, ArcelorMittal SA is 1.0 times less risky than Aperam SA. It trades about 0.14 of its potential returns per unit of risk. Aperam SA is currently generating about 0.06 per unit of risk. If you would invest 2,397 in ArcelorMittal SA on April 21, 2025 and sell it today you would earn a total of 401.00 from holding ArcelorMittal SA or generate 16.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ArcelorMittal SA vs. Aperam SA
Performance |
Timeline |
ArcelorMittal SA |
Aperam SA |
ArcelorMittal and Aperam SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ArcelorMittal and Aperam SA
The main advantage of trading using opposite ArcelorMittal and Aperam SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal position performs unexpectedly, Aperam SA 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 Aperam SA will offset losses from the drop in Aperam SA's long position.ArcelorMittal vs. Aperam SA | ArcelorMittal vs. ArcelorMittal SA ADR | ArcelorMittal vs. Vallourec | ArcelorMittal vs. Jacquet Metal Service |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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