Correlation Between Gold Fields and Algoma Steel
Can any of the company-specific risk be diversified away by investing in both Gold Fields 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 Gold Fields and Algoma Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Fields Ltd and Algoma Steel Group, you can compare the effects of market volatilities on Gold Fields 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 Gold Fields with a short position of Algoma Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Algoma Steel.
Diversification Opportunities for Gold Fields and Algoma Steel
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gold and Algoma is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd 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 Gold Fields 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 Gold Fields Ltd 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 Gold Fields i.e., Gold Fields and Algoma Steel go up and down completely randomly.
Pair Corralation between Gold Fields and Algoma Steel
Considering the 90-day investment horizon Gold Fields is expected to generate 1.4 times less return on investment than Algoma Steel. But when comparing it to its historical volatility, Gold Fields Ltd is 3.44 times less risky than Algoma Steel. It trades about 0.09 of its potential returns per unit of risk. Algoma Steel Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 33.00 in Algoma Steel Group on May 1, 2025 and sell it today you would lose (4.00) from holding Algoma Steel Group or give up 12.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Gold Fields Ltd vs. Algoma Steel Group
Performance |
| Timeline |
| Gold Fields |
| Algoma Steel Group |
Gold Fields and Algoma Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Fields and Algoma Steel
The main advantage of trading using opposite Gold Fields and Algoma Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields 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.| Gold Fields vs. First Majestic Silver | Gold Fields vs. AngloGold Ashanti plc | Gold Fields vs. Celanese | Gold Fields vs. Dakota Gold Corp |
| 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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