Correlation Between ArcelorMittal and Bunker Hill

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

By analyzing existing cross correlation between ArcelorMittal SA ADR and Bunker Hill Mining, you can compare the effects of market volatilities on ArcelorMittal and Bunker Hill 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 ArcelorMittal with a short position of Bunker Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and Bunker Hill.

Diversification Opportunities for ArcelorMittal and Bunker Hill

0.0

Correlation Coefficient

ArcelorMittal  Bunker Hill

Pay attention - limited upside

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

Pair Corralation between ArcelorMittal and Bunker Hill

Allowing for the 90-day total investment horizon ArcelorMittal SA ADR is expected to under-perform the Bunker Hill. But the stock apears to be less risky and, when comparing its historical volatility, ArcelorMittal SA ADR is 1.96 times less risky than Bunker Hill. The stock trades about -0.12 of its potential returns per unit of risk. The Bunker Hill Mining is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  9.90  in Bunker Hill Mining on January 24, 2024 and sell it today you would lose (0.10) from holding Bunker Hill Mining or give up 1.01% of portfolio value over 90 days.

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

ArcelorMittal SA ADR  vs.  Bunker Hill Mining

ArcelorMittal SA ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ArcelorMittal SA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the 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.

Bunker Hill Mining

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bunker Hill Mining are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile essential indicators, Bunker Hill disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ArcelorMittal and Bunker Hill

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

The idea behind ArcelorMittal SA ADR and Bunker Hill Mining 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.