Correlation Between Mangels Industrial and United States

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

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

Diversification Opportunities for Mangels Industrial and United States

0.0

Correlation Coefficient

Mangels Industrial  United States

Pay attention - limited upside

The 3 months correlation between Mangels and United is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mangels Industrial SA and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel and Mangels Industrial 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 Mangels Industrial SA are associated (or correlated) with United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of Mangels Industrial i.e., Mangels Industrial and United States go up and down completely randomly.

Pair Corralation between Mangels Industrial and United States

Assuming the 90 days trading horizon Mangels Industrial is expected to generate 2.16 times less return on investment than United States. In addition to that, Mangels Industrial is 2.09 times more volatile than United States Steel. It trades about 0.07 of its total potential returns per unit of risk. United States Steel is currently generating about 0.33 per unit of volatility. If you would invest  18,655  in United States Steel on October 22, 2024 and sell it today you would earn a total of  3,045  from holding United States Steel or generate 16.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Mangels Industrial SA  vs.  United States Steel

Mangels Industrial

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Mangels Industrial SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Preferred Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

United States Steel

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days United States Steel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, United States is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mangels Industrial and United States

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

The idea behind Mangels Industrial SA and United States Steel 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.