Correlation Between Coursera and Algoma Steel

Can any of the company-specific risk be diversified away by investing in both Coursera and Algoma Steel 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 Coursera and Algoma Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Coursera and Algoma Steel Group, you can compare the effects of market volatilities on Coursera and Algoma Steel 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 Coursera with a short position of Algoma Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coursera and Algoma Steel.

Diversification Opportunities for Coursera and Algoma Steel

-0.42

Correlation Coefficient

Coursera  Algoma Steel

Very good diversification

The 3 months correlation between Coursera and Algoma is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Coursera and Algoma Steel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algoma Steel Group and Coursera 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 Coursera are associated (or correlated) with Algoma Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algoma Steel Group has no effect on the direction of Coursera i.e., Coursera and Algoma Steel go up and down completely randomly.

Pair Corralation between Coursera and Algoma Steel

Given the investment horizon of 90 days Coursera is expected to under-perform the Algoma Steel. In addition to that, Coursera is 1.51 times more volatile than Algoma Steel Group. It trades about -0.01 of its total potential returns per unit of risk. Algoma Steel Group is currently generating about 0.02 per unit of volatility. If you would invest  708.00  in Algoma Steel Group on October 13, 2024 and sell it today you would earn a total of  115.00  from holding Algoma Steel Group or generate 16.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Coursera  vs.  Algoma Steel Group

Coursera

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Coursera are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Coursera may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Algoma Steel Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Algoma Steel Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Coursera and Algoma Steel

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

The idea behind Coursera and Algoma Steel Group 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.