Correlation Between Ferrexpo PLC and Salzgitter
Can any of the company-specific risk be diversified away by investing in both Ferrexpo PLC and Salzgitter 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 Ferrexpo PLC and Salzgitter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferrexpo PLC and Salzgitter AG ADR, you can compare the effects of market volatilities on Ferrexpo PLC and Salzgitter 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 Ferrexpo PLC with a short position of Salzgitter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferrexpo PLC and Salzgitter.
Diversification Opportunities for Ferrexpo PLC and Salzgitter
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ferrexpo and Salzgitter is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ferrexpo PLC and Salzgitter AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salzgitter AG ADR and Ferrexpo PLC 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 Ferrexpo PLC are associated (or correlated) with Salzgitter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salzgitter AG ADR has no effect on the direction of Ferrexpo PLC i.e., Ferrexpo PLC and Salzgitter go up and down completely randomly.
Pair Corralation between Ferrexpo PLC and Salzgitter
Assuming the 90 days horizon Ferrexpo PLC is expected to generate 6.68 times more return on investment than Salzgitter. However, Ferrexpo PLC is 6.68 times more volatile than Salzgitter AG ADR. It trades about 0.14 of its potential returns per unit of risk. Salzgitter AG ADR is currently generating about -0.23 per unit of risk. If you would invest 95.00 in Ferrexpo PLC on September 29, 2024 and sell it today you would earn a total of 28.00 from holding Ferrexpo PLC or generate 29.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 90.91% |
Values | Daily Returns |
Ferrexpo PLC vs. Salzgitter AG ADR
Performance |
Timeline |
Ferrexpo PLC |
Salzgitter AG ADR |
Ferrexpo PLC and Salzgitter Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ferrexpo PLC and Salzgitter
The main advantage of trading using opposite Ferrexpo PLC and Salzgitter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferrexpo PLC position performs unexpectedly, Salzgitter 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 Salzgitter will offset losses from the drop in Salzgitter's long position.Ferrexpo PLC vs. Companhia Siderurgica Nacional | Ferrexpo PLC vs. Olympic Steel | Ferrexpo PLC vs. Universal Stainless Alloy | Ferrexpo PLC vs. Usinas Siderurgicas de |
Salzgitter vs. Companhia Siderurgica Nacional | Salzgitter vs. Olympic Steel | Salzgitter vs. Universal Stainless Alloy | Salzgitter vs. Usinas Siderurgicas de |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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