Correlation Between CHRISTIAN DIOR and STEEL DYNAMICS
Can any of the company-specific risk be diversified away by investing in both CHRISTIAN DIOR and STEEL DYNAMICS 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 CHRISTIAN DIOR and STEEL DYNAMICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHRISTIAN DIOR ADR14EO2 and STEEL DYNAMICS, you can compare the effects of market volatilities on CHRISTIAN DIOR and STEEL DYNAMICS 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 CHRISTIAN DIOR with a short position of STEEL DYNAMICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHRISTIAN DIOR and STEEL DYNAMICS.
Diversification Opportunities for CHRISTIAN DIOR and STEEL DYNAMICS
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHRISTIAN and STEEL is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding CHRISTIAN DIOR ADR14EO2 and STEEL DYNAMICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STEEL DYNAMICS and CHRISTIAN DIOR 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 CHRISTIAN DIOR ADR14EO2 are associated (or correlated) with STEEL DYNAMICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STEEL DYNAMICS has no effect on the direction of CHRISTIAN DIOR i.e., CHRISTIAN DIOR and STEEL DYNAMICS go up and down completely randomly.
Pair Corralation between CHRISTIAN DIOR and STEEL DYNAMICS
Assuming the 90 days trading horizon CHRISTIAN DIOR ADR14EO2 is expected to generate 0.95 times more return on investment than STEEL DYNAMICS. However, CHRISTIAN DIOR ADR14EO2 is 1.05 times less risky than STEEL DYNAMICS. It trades about 0.09 of its potential returns per unit of risk. STEEL DYNAMICS is currently generating about -0.06 per unit of risk. If you would invest 14,600 in CHRISTIAN DIOR ADR14EO2 on October 16, 2024 and sell it today you would earn a total of 300.00 from holding CHRISTIAN DIOR ADR14EO2 or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHRISTIAN DIOR ADR14EO2 vs. STEEL DYNAMICS
Performance |
| Timeline |
| CHRISTIAN DIOR ADR14EO2 |
| STEEL DYNAMICS |
CHRISTIAN DIOR and STEEL DYNAMICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHRISTIAN DIOR and STEEL DYNAMICS
The main advantage of trading using opposite CHRISTIAN DIOR and STEEL DYNAMICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHRISTIAN DIOR position performs unexpectedly, STEEL DYNAMICS 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 STEEL DYNAMICS will offset losses from the drop in STEEL DYNAMICS's long position.| CHRISTIAN DIOR vs. STEEL DYNAMICS | CHRISTIAN DIOR vs. Tianjin Capital Environmental | CHRISTIAN DIOR vs. New Residential Investment | CHRISTIAN DIOR vs. NEW MILLENNIUM IRON |
| STEEL DYNAMICS vs. China Communications Services | STEEL DYNAMICS vs. ePlay Digital | STEEL DYNAMICS vs. COLUMBIA SPORTSWEAR | STEEL DYNAMICS vs. ARISTOCRAT LEISURE |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |