Correlation Between Arcelormittal and Atreca

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Can any of the company-specific risk be diversified away by investing in both Arcelormittal and Atreca 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 Atreca into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcelormittal and Atreca Inc, you can compare the effects of market volatilities on Arcelormittal and Atreca 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 Atreca. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcelormittal and Atreca.

Diversification Opportunities for Arcelormittal and Atreca

  Correlation Coefficient

Very poor diversification

The 3 months correlation between Arcelormittal and Atreca is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Arcelormittal and Atreca Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atreca Inc 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 are associated (or correlated) with Atreca. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atreca Inc has no effect on the direction of Arcelormittal i.e., Arcelormittal and Atreca go up and down completely randomly.

Pair Corralation between Arcelormittal and Atreca

Given the investment horizon of 90 days Arcelormittal is expected to generate 0.48 times more return on investment than Atreca. However, Arcelormittal is 2.09 times less risky than Atreca. It trades about -0.19 of its potential returns per unit of risk. Atreca Inc is currently generating about -0.12 per unit of risk. If you would invest  7,049  in Arcelormittal on December 20, 2022 and sell it today you would lose (814.00)  from holding Arcelormittal or give up 11.55% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

Arcelormittal  vs.  Atreca Inc

 Performance (%) 

Arcelormittal Performance

2 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in Arcelormittal are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Arcelormittal is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the insiders.
Atreca Inc 

Atreca Performance

9 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in Atreca Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, Atreca disclosed solid returns over the last few months and may actually be approaching a breakup point.

Arcelormittal and Atreca Volatility Contrast

   Predicted Return Density   

Pair Trading with Arcelormittal and Atreca

The main advantage of trading using opposite Arcelormittal and Atreca positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcelormittal position performs unexpectedly, Atreca 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 Atreca will offset losses from the drop in Atreca's long position.
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The idea behind Arcelormittal and Atreca Inc 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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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 Price Transformation module to use Price Transformation models to analyze depth of different equity instruments across global markets.

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