Correlation Between ArcelorMittal and IENOVA
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By analyzing existing cross correlation between ArcelorMittal SA ADR and IENOVA 475 15 JAN 51, you can compare the effects of market volatilities on ArcelorMittal and IENOVA 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 IENOVA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and IENOVA.
Diversification Opportunities for ArcelorMittal and IENOVA
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ArcelorMittal and IENOVA is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA ADR and IENOVA 475 15 JAN 51 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IENOVA 475 15 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 IENOVA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IENOVA 475 15 has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and IENOVA go up and down completely randomly.
Pair Corralation between ArcelorMittal and IENOVA
Allowing for the 90-day total investment horizon ArcelorMittal SA ADR is expected to under-perform the IENOVA. But the stock apears to be less risky and, when comparing its historical volatility, ArcelorMittal SA ADR is 4.76 times less risky than IENOVA. The stock trades about -0.11 of its potential returns per unit of risk. The IENOVA 475 15 JAN 51 is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 7,410 in IENOVA 475 15 JAN 51 on September 19, 2024 and sell it today you would earn a total of 215.00 from holding IENOVA 475 15 JAN 51 or generate 2.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 19.05% |
Values | Daily Returns |
ArcelorMittal SA ADR vs. IENOVA 475 15 JAN 51
Performance |
Timeline |
ArcelorMittal SA ADR |
IENOVA 475 15 |
ArcelorMittal and IENOVA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ArcelorMittal and IENOVA
The main advantage of trading using opposite ArcelorMittal and IENOVA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal position performs unexpectedly, IENOVA 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 IENOVA will offset losses from the drop in IENOVA's long position.The idea behind ArcelorMittal SA ADR and IENOVA 475 15 JAN 51 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.IENOVA vs. Xiabuxiabu Catering Management | IENOVA vs. SEI Investments | IENOVA vs. ArcelorMittal SA ADR | IENOVA vs. Grupo Aeroportuario del |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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