Correlation Between United States and Mangels Industrial

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

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

Diversification Opportunities for United States and Mangels Industrial

0.0

Correlation Coefficient

United States  Mangels Industrial

Pay attention - limited upside

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

Pair Corralation between United States and Mangels Industrial

Assuming the 90 days trading horizon United States Steel is expected to generate 0.95 times more return on investment than Mangels Industrial. However, United States Steel is 1.06 times less risky than Mangels Industrial. It trades about 0.04 of its potential returns per unit of risk. Mangels Industrial SA is currently generating about -0.02 per unit of risk. If you would invest  14,301  in United States Steel on October 22, 2024 and sell it today you would earn a total of  7,399  from holding United States Steel or generate 51.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	91.55%
Values	Daily Returns

United States Steel  vs.  Mangels Industrial SA

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.

Mangels Industrial

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with United States and Mangels Industrial

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

The idea behind United States Steel and Mangels Industrial SA 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.