Correlation Between Commercial Metals and SSR Mining
Can any of the company-specific risk be diversified away by investing in both Commercial Metals and SSR Mining 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 Commercial Metals and SSR Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commercial Metals and SSR Mining, you can compare the effects of market volatilities on Commercial Metals and SSR Mining 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 Commercial Metals with a short position of SSR Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial Metals and SSR Mining.
Diversification Opportunities for Commercial Metals and SSR Mining
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Commercial and SSR is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Metals and SSR Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSR Mining and Commercial Metals 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 Commercial Metals are associated (or correlated) with SSR Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSR Mining has no effect on the direction of Commercial Metals i.e., Commercial Metals and SSR Mining go up and down completely randomly.
Pair Corralation between Commercial Metals and SSR Mining
Considering the 90-day investment horizon Commercial Metals is expected to under-perform the SSR Mining. But the stock apears to be less risky and, when comparing its historical volatility, Commercial Metals is 1.43 times less risky than SSR Mining. The stock trades about -0.05 of its potential returns per unit of risk. The SSR Mining is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 614.00 in SSR Mining on November 1, 2024 and sell it today you would earn a total of 202.00 from holding SSR Mining or generate 32.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commercial Metals vs. SSR Mining
Performance |
| Timeline |
| Commercial Metals |
| SSR Mining |
Commercial Metals and SSR Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial Metals and SSR Mining
The main advantage of trading using opposite Commercial Metals and SSR Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial Metals position performs unexpectedly, SSR Mining 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 SSR Mining will offset losses from the drop in SSR Mining's long position.| Commercial Metals vs. Olympic Steel | Commercial Metals vs. Steel Dynamics | Commercial Metals vs. Nucor Corp | Commercial Metals vs. Universal Stainless Alloy |
| SSR Mining vs. Centerra Gold | SSR Mining vs. Gold Fields Ltd | SSR Mining vs. Eldorado Gold Corp | SSR Mining vs. Osisko Gold Ro |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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