Correlation Between ALGOMA STEEL and Crown Holdings

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

By analyzing existing cross correlation between ALGOMA STEEL GROUP and Crown Holdings, you can compare the effects of market volatilities on ALGOMA STEEL and Crown Holdings 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 ALGOMA STEEL with a short position of Crown Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALGOMA STEEL and Crown Holdings.

Diversification Opportunities for ALGOMA STEEL and Crown Holdings

0.0

Correlation Coefficient

ALGOMA STEEL  Crown Holdings

Pay attention - limited upside

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

Pair Corralation between ALGOMA STEEL and Crown Holdings

If you would invest (100.00) in Crown Holdings on October 1, 2024 and sell it today you would earn a total of  100.00  from holding Crown Holdings or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ALGOMA STEEL GROUP  vs.  Crown Holdings

ALGOMA STEEL GROUP

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ALGOMA STEEL GROUP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ALGOMA STEEL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Crown Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crown Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with ALGOMA STEEL and Crown Holdings

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

The idea behind ALGOMA STEEL GROUP and Crown Holdings 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..