Correlation Between ArcelorMittal and ASM International

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

By analyzing existing cross correlation between ArcelorMittal SA and ASM International NV, you can compare the effects of market volatilities on ArcelorMittal and ASM International 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 ArcelorMittal with a short position of ASM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and ASM International.

Diversification Opportunities for ArcelorMittal and ASM International

0.12

Correlation Coefficient

ArcelorMittal  ASM International

Average diversification

The 3 months correlation between ArcelorMittal and ASM is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA and ASM International NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASM International and ArcelorMittal 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 ArcelorMittal SA are associated (or correlated) with ASM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASM International has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and ASM International go up and down completely randomly.

Pair Corralation between ArcelorMittal and ASM International

Assuming the 90 days horizon ArcelorMittal SA is expected to generate 0.71 times more return on investment than ASM International. However, ArcelorMittal SA is 1.41 times less risky than ASM International. It trades about 0.05 of its potential returns per unit of risk. ASM International NV is currently generating about 0.02 per unit of risk. If you would invest  2,684  in ArcelorMittal SA on May 2, 2025 and sell it today you would earn a total of  141.00  from holding ArcelorMittal SA or generate 5.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ArcelorMittal SA  vs.  ASM International NV

ArcelorMittal SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ArcelorMittal SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, ArcelorMittal is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

ASM International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ASM International NV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, ASM International is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ArcelorMittal and ASM International

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

The idea behind ArcelorMittal SA and ASM International NV 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.

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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.