Correlation Between ArcelorMittal and Randstad
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal and Randstad 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 Randstad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ArcelorMittal SA and Randstad NV, you can compare the effects of market volatilities on ArcelorMittal and Randstad 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 Randstad. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and Randstad.
Diversification Opportunities for ArcelorMittal and Randstad
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ArcelorMittal and Randstad is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA and Randstad NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Randstad NV 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 Randstad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Randstad NV has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and Randstad go up and down completely randomly.
Pair Corralation between ArcelorMittal and Randstad
Assuming the 90 days horizon ArcelorMittal is expected to generate 1.6 times less return on investment than Randstad. In addition to that, ArcelorMittal is 1.05 times more volatile than Randstad NV. It trades about 0.14 of its total potential returns per unit of risk. Randstad NV is currently generating about 0.23 per unit of volatility. If you would invest 3,308 in Randstad NV on April 22, 2025 and sell it today you would earn a total of 962.00 from holding Randstad NV or generate 29.08% 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. Randstad NV
Performance |
Timeline |
ArcelorMittal SA |
Randstad NV |
ArcelorMittal and Randstad Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ArcelorMittal and Randstad
The main advantage of trading using opposite ArcelorMittal and Randstad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal position performs unexpectedly, Randstad 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 Randstad will offset losses from the drop in Randstad'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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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