Correlation Between City Steel and Susco Public
Can any of the company-specific risk be diversified away by investing in both City Steel and Susco Public 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 City Steel and Susco Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City Steel Public and Susco Public, you can compare the effects of market volatilities on City Steel and Susco Public 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 City Steel with a short position of Susco Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of City Steel and Susco Public.
Diversification Opportunities for City Steel and Susco Public
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between City and Susco is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding City Steel Public and Susco Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Susco Public and City 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 City Steel Public are associated (or correlated) with Susco Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Susco Public has no effect on the direction of City Steel i.e., City Steel and Susco Public go up and down completely randomly.
Pair Corralation between City Steel and Susco Public
Assuming the 90 days trading horizon City Steel Public is expected to under-perform the Susco Public. In addition to that, City Steel is 1.35 times more volatile than Susco Public. It trades about -0.14 of its total potential returns per unit of risk. Susco Public is currently generating about -0.08 per unit of volatility. If you would invest 280.00 in Susco Public on December 1, 2024 and sell it today you would lose (10.00) from holding Susco Public or give up 3.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
City Steel Public vs. Susco Public
Performance |
| Timeline |
| City Steel Public |
| Susco Public |
City Steel and Susco Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City Steel and Susco Public
The main advantage of trading using opposite City Steel and Susco Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City Steel position performs unexpectedly, Susco Public 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 Susco Public will offset losses from the drop in Susco Public's long position.| City Steel vs. Capital Engineering Network | City Steel vs. Bangsaphan Barmill Public | City Steel vs. CSP Steel Center | City Steel vs. Chukai Public |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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