Correlation Between Aperam PK and TMST Old

Can any of the company-specific risk be diversified away by investing in both Aperam PK and TMST Old 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 Aperam PK and TMST Old into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aperam PK and TMST Old, you can compare the effects of market volatilities on Aperam PK and TMST Old 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 Aperam PK with a short position of TMST Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aperam PK and TMST Old.

Diversification Opportunities for Aperam PK and TMST Old

0.37

Correlation Coefficient

Aperam PK  TMST Old

Weak diversification

The 3 months correlation between Aperam and TMST is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aperam PK and TMST Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMST Old and Aperam PK 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 Aperam PK are associated (or correlated) with TMST Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMST Old has no effect on the direction of Aperam PK i.e., Aperam PK and TMST Old go up and down completely randomly.

Pair Corralation between Aperam PK and TMST Old

If you would invest  2,950  in Aperam PK on September 15, 2024 and sell it today you would earn a total of  44.00  from holding Aperam PK or generate 1.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Aperam PK  vs.  TMST Old

Aperam PK

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aperam PK are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain primary indicators, Aperam PK showed solid returns over the last few months and may actually be approaching a breakup point.

TMST Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TMST Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, TMST Old is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Aperam PK and TMST Old

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

The idea behind Aperam PK and TMST Old 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.