Correlation Between Contango ORE and Algoma Steel
Can any of the company-specific risk be diversified away by investing in both Contango ORE and Algoma Steel 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 Contango ORE and Algoma Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Contango ORE and Algoma Steel Group, you can compare the effects of market volatilities on Contango ORE and Algoma Steel 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 Contango ORE with a short position of Algoma Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Contango ORE and Algoma Steel.
Diversification Opportunities for Contango ORE and Algoma Steel
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Contango and Algoma is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Contango ORE and Algoma Steel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algoma Steel Group and Contango ORE 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 Contango ORE are associated (or correlated) with Algoma Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algoma Steel Group has no effect on the direction of Contango ORE i.e., Contango ORE and Algoma Steel go up and down completely randomly.
Pair Corralation between Contango ORE and Algoma Steel
Given the investment horizon of 90 days Contango ORE is expected to generate 0.42 times more return on investment than Algoma Steel. However, Contango ORE is 2.4 times less risky than Algoma Steel. It trades about 0.11 of its potential returns per unit of risk. Algoma Steel Group is currently generating about 0.02 per unit of risk. If you would invest 1,994 in Contango ORE on June 7, 2025 and sell it today you would earn a total of 145.00 from holding Contango ORE or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Contango ORE vs. Algoma Steel Group
Performance |
| Timeline |
| Contango ORE |
| Algoma Steel Group |
Contango ORE and Algoma Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Contango ORE and Algoma Steel
The main advantage of trading using opposite Contango ORE and Algoma Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contango ORE position performs unexpectedly, Algoma Steel 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 Algoma Steel will offset losses from the drop in Algoma Steel's long position.| Contango ORE vs. First Guaranty Bancshares | Contango ORE vs. Glen Burnie Bancorp | Contango ORE vs. Princeton Capital |
| Algoma Steel vs. Champion Iron Limited | Algoma Steel vs. Algoma Steel Group | Algoma Steel vs. Algoma Steel Group | Algoma Steel vs. Evolv Technologies Holdings |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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