Correlation Between Aperam PK and Ferrexpo PLC

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

By analyzing existing cross correlation between Aperam PK and Ferrexpo PLC, you can compare the effects of market volatilities on Aperam PK and Ferrexpo PLC 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 PK with a short position of Ferrexpo PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aperam PK and Ferrexpo PLC.

Diversification Opportunities for Aperam PK and Ferrexpo PLC

-0.48

Correlation Coefficient

Aperam PK  Ferrexpo PLC

Very good diversification

The 3 months correlation between Aperam and Ferrexpo is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Aperam PK and Ferrexpo PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferrexpo PLC and Aperam PK 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 PK are associated (or correlated) with Ferrexpo PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferrexpo PLC has no effect on the direction of Aperam PK i.e., Aperam PK and Ferrexpo PLC go up and down completely randomly.

Pair Corralation between Aperam PK and Ferrexpo PLC

Assuming the 90 days horizon Aperam PK is expected to generate 0.69 times more return on investment than Ferrexpo PLC. However, Aperam PK is 1.45 times less risky than Ferrexpo PLC. It trades about 0.01 of its potential returns per unit of risk. Ferrexpo PLC is currently generating about -0.19 per unit of risk. If you would invest  2,925  in Aperam PK on May 6, 2025 and sell it today you would lose (8.00) from holding Aperam PK or give up 0.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

Aperam PK  vs.  Ferrexpo PLC

Aperam PK

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aperam PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Aperam PK is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ferrexpo PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ferrexpo PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Aperam PK and Ferrexpo PLC

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

The idea behind Aperam PK and Ferrexpo PLC 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.