Correlation Between Iron Force and Quintain Steel

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

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

Diversification Opportunities for Iron Force and Quintain Steel

0.34

Correlation Coefficient

Iron Force  Quintain Steel

Weak diversification

The 3 months correlation between Iron and Quintain is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Iron Force Industrial and Quintain Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quintain Steel and Iron Force 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 Iron Force Industrial are associated (or correlated) with Quintain Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quintain Steel has no effect on the direction of Iron Force i.e., Iron Force and Quintain Steel go up and down completely randomly.

Pair Corralation between Iron Force and Quintain Steel

Assuming the 90 days trading horizon Iron Force Industrial is expected to generate 1.13 times more return on investment than Quintain Steel. However, Iron Force is 1.13 times more volatile than Quintain Steel Co. It trades about 0.04 of its potential returns per unit of risk. Quintain Steel Co is currently generating about -0.01 per unit of risk. If you would invest  7,644  in Iron Force Industrial on September 4, 2024 and sell it today you would earn a total of  2,706  from holding Iron Force Industrial or generate 35.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Iron Force Industrial  vs.  Quintain Steel Co

Iron Force Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iron Force Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Iron Force is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Quintain Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quintain Steel Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Quintain Steel is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Iron Force and Quintain Steel

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

The idea behind Iron Force Industrial and Quintain Steel Co 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.