Correlation Between Algoma Steel and Xurpas

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

By analyzing existing cross correlation between Algoma Steel Group and Xurpas Inc, you can compare the effects of market volatilities on Algoma Steel and Xurpas 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 Algoma Steel with a short position of Xurpas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algoma Steel and Xurpas.

Diversification Opportunities for Algoma Steel and Xurpas

0.32

Correlation Coefficient

Algoma Steel  Xurpas

Weak diversification

The 3 months correlation between Algoma and Xurpas is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Algoma Steel Group and Xurpas Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xurpas Inc and Algoma Steel 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 Algoma Steel Group are associated (or correlated) with Xurpas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xurpas Inc has no effect on the direction of Algoma Steel i.e., Algoma Steel and Xurpas go up and down completely randomly.

Pair Corralation between Algoma Steel and Xurpas

Given the investment horizon of 90 days Algoma Steel Group is expected to under-perform the Xurpas. But the stock apears to be less risky and, when comparing its historical volatility, Algoma Steel Group is 1.11 times less risky than Xurpas. The stock trades about -0.01 of its potential returns per unit of risk. The Xurpas Inc is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  4,221  in Xurpas Inc on May 6, 2025 and sell it today you would earn a total of  1,263  from holding Xurpas Inc or generate 29.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	53.23%
Values	Daily Returns

Algoma Steel Group  vs.  Xurpas Inc

Algoma Steel Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Algoma Steel Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Algoma Steel is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Xurpas Inc

Risk-Adjusted Performance

Solid

Over the last 90 days Xurpas Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly fragile basic indicators, Xurpas showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Algoma Steel and Xurpas

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

The idea behind Algoma Steel Group and Xurpas 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.