Correlation Between Aperam SA and Champion Iron
Can any of the company-specific risk be diversified away by investing in both Aperam SA and Champion Iron 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 SA and Champion Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aperam SA and Champion Iron Limited, you can compare the effects of market volatilities on Aperam SA and Champion Iron 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 SA with a short position of Champion Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aperam SA and Champion Iron.
Diversification Opportunities for Aperam SA and Champion Iron
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aperam and Champion is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Aperam SA and Champion Iron Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Iron Limited and Aperam SA 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 SA are associated (or correlated) with Champion Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Iron Limited has no effect on the direction of Aperam SA i.e., Aperam SA and Champion Iron go up and down completely randomly.
Pair Corralation between Aperam SA and Champion Iron
Assuming the 90 days horizon Aperam SA is expected to generate 15.56 times less return on investment than Champion Iron. But when comparing it to its historical volatility, Aperam SA is 9.2 times less risky than Champion Iron. It trades about 0.13 of its potential returns per unit of risk. Champion Iron Limited is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 296.00 in Champion Iron Limited on September 12, 2025 and sell it today you would earn a total of 98.00 from holding Champion Iron Limited or generate 33.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aperam SA vs. Champion Iron Limited
Performance |
| Timeline |
| Aperam SA |
| Champion Iron Limited |
Aperam SA and Champion Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aperam SA and Champion Iron
The main advantage of trading using opposite Aperam SA and Champion Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aperam SA position performs unexpectedly, Champion Iron 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 Champion Iron will offset losses from the drop in Champion Iron's long position.| Aperam SA vs. JFE Holdings | Aperam SA vs. Norsk Hydro ASA | Aperam SA vs. Norsk Hydro ASA | Aperam SA vs. Nippon Sanso Holdings |
| Champion Iron vs. Sims Metal Management | Champion Iron vs. Labrador Iron Ore | Champion Iron vs. Sims Limited | Champion Iron vs. Aperam SA |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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