Correlation Between ArcelorMittal and Aperam PK

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

By analyzing existing cross correlation between ArcelorMittal SA ADR and Aperam PK, you can compare the effects of market volatilities on ArcelorMittal and Aperam PK 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 Aperam PK. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and Aperam PK.

Diversification Opportunities for ArcelorMittal and Aperam PK

0.54

Correlation Coefficient

ArcelorMittal  Aperam PK

Very weak diversification

The 3 months correlation between ArcelorMittal and Aperam is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA ADR and Aperam PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aperam PK 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 ADR are associated (or correlated) with Aperam PK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aperam PK has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and Aperam PK go up and down completely randomly.

Pair Corralation between ArcelorMittal and Aperam PK

Allowing for the 90-day total investment horizon ArcelorMittal SA ADR is expected to under-perform the Aperam PK. But the stock apears to be less risky and, when comparing its historical volatility, ArcelorMittal SA ADR is 1.63 times less risky than Aperam PK. The stock trades about -0.03 of its potential returns per unit of risk. The Aperam PK is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,879  in Aperam PK on October 7, 2024 and sell it today you would lose (256.00) from holding Aperam PK or give up 8.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	89.92%
Values	Daily Returns

ArcelorMittal SA ADR  vs.  Aperam PK

ArcelorMittal SA ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ArcelorMittal SA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the 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.

Aperam PK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aperam PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with ArcelorMittal and Aperam PK

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

The idea behind ArcelorMittal SA ADR and Aperam PK 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.