Correlation Between Ryerson Holding and Ampco Pittsburgh

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

By analyzing existing cross correlation between Ryerson Holding Corp and Ampco Pittsburgh, you can compare the effects of market volatilities on Ryerson Holding and Ampco Pittsburgh 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 Ryerson Holding with a short position of Ampco Pittsburgh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ryerson Holding and Ampco Pittsburgh.

Diversification Opportunities for Ryerson Holding and Ampco Pittsburgh

-0.23

Correlation Coefficient

Ryerson Holding  Ampco Pittsburgh

Very good diversification

The 3 months correlation between Ryerson and Ampco is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ryerson Holding Corp and Ampco Pittsburgh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampco Pittsburgh and Ryerson Holding 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 Ryerson Holding Corp are associated (or correlated) with Ampco Pittsburgh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampco Pittsburgh has no effect on the direction of Ryerson Holding i.e., Ryerson Holding and Ampco Pittsburgh go up and down completely randomly.

Pair Corralation between Ryerson Holding and Ampco Pittsburgh

Considering the 90-day investment horizon Ryerson Holding Corp is expected to generate 0.68 times more return on investment than Ampco Pittsburgh. However, Ryerson Holding Corp is 1.46 times less risky than Ampco Pittsburgh. It trades about 0.2 of its potential returns per unit of risk. Ampco Pittsburgh is currently generating about 0.08 per unit of risk. If you would invest  1,818  in Ryerson Holding Corp on September 1, 2024 and sell it today you would earn a total of  752.00  from holding Ryerson Holding Corp or generate 41.36% return on investment over 90 days.

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

Ryerson Holding Corp  vs.  Ampco Pittsburgh

Ryerson Holding Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ryerson Holding Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Ryerson Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Ampco Pittsburgh

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ampco Pittsburgh are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Ampco Pittsburgh reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ryerson Holding and Ampco Pittsburgh

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

The idea behind Ryerson Holding Corp and Ampco Pittsburgh 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.