Correlation Between Commercial Metals and Universal Stainless
Can any of the company-specific risk be diversified away by investing in both Commercial Metals and Universal Stainless 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 Universal Stainless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commercial Metals and Universal Stainless Alloy, you can compare the effects of market volatilities on Commercial Metals and Universal Stainless 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 Universal Stainless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial Metals and Universal Stainless.
Diversification Opportunities for Commercial Metals and Universal Stainless
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Commercial and Universal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Metals and Universal Stainless Alloy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Stainless Alloy 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 Universal Stainless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Stainless Alloy has no effect on the direction of Commercial Metals i.e., Commercial Metals and Universal Stainless go up and down completely randomly.
Pair Corralation between Commercial Metals and Universal Stainless
If you would invest 4,895 in Commercial Metals on November 9, 2024 and sell it today you would earn a total of 119.00 from holding Commercial Metals or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Commercial Metals vs. Universal Stainless Alloy
Performance |
| Timeline |
| Commercial Metals |
| Universal Stainless Alloy |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Commercial Metals and Universal Stainless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial Metals and Universal Stainless
The main advantage of trading using opposite Commercial Metals and Universal Stainless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial Metals position performs unexpectedly, Universal Stainless 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 Universal Stainless will offset losses from the drop in Universal Stainless' long position.| Commercial Metals vs. Olympic Steel | Commercial Metals vs. Steel Dynamics | Commercial Metals vs. Nucor Corp | Commercial Metals vs. POSCO Holdings |
| Universal Stainless vs. Olympic Steel | Universal Stainless vs. Outokumpu Oyj ADR | Universal Stainless vs. Usinas Siderurgicas de | Universal Stainless vs. POSCO Holdings |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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