Correlation Between ArcelorMittal and Sacyr SA

Can any of the company-specific risk be diversified away by investing in both ArcelorMittal and Sacyr 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 Sacyr 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 Sacyr SA, you can compare the effects of market volatilities on ArcelorMittal and Sacyr 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 Sacyr SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and Sacyr SA.

Diversification Opportunities for ArcelorMittal and Sacyr SA

0.77

Correlation Coefficient

ArcelorMittal  Sacyr SA

Poor diversification

The 3 months correlation between ArcelorMittal and Sacyr is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA and Sacyr SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sacyr 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 Sacyr SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sacyr SA has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and Sacyr SA go up and down completely randomly.

Pair Corralation between ArcelorMittal and Sacyr SA

Assuming the 90 days trading horizon ArcelorMittal SA is expected to generate 1.91 times more return on investment than Sacyr SA. However, ArcelorMittal is 1.91 times more volatile than Sacyr SA. It trades about 0.13 of its potential returns per unit of risk. Sacyr SA is currently generating about 0.24 per unit of risk. If you would invest  2,397  in ArcelorMittal SA on April 22, 2025 and sell it today you would earn a total of  400.00  from holding ArcelorMittal SA or generate 16.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

ArcelorMittal SA  vs.  Sacyr SA

ArcelorMittal SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ArcelorMittal SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ArcelorMittal exhibited solid returns over the last few months and may actually be approaching a breakup point.

Sacyr SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sacyr SA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Sacyr SA exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ArcelorMittal and Sacyr SA

The main advantage of trading using opposite ArcelorMittal and Sacyr SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal position performs unexpectedly, Sacyr 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 Sacyr SA will offset losses from the drop in Sacyr SA's long position.

The idea behind ArcelorMittal SA and Sacyr SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.