Correlation Between HITACHI STRMACHADR2 and Steel Dynamics
Can any of the company-specific risk be diversified away by investing in both HITACHI STRMACHADR2 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 HITACHI STRMACHADR2 and Steel Dynamics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HITACHI STRMACHADR2 and Steel Dynamics, you can compare the effects of market volatilities on HITACHI STRMACHADR2 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 HITACHI STRMACHADR2 with a short position of Steel Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of HITACHI STRMACHADR2 and Steel Dynamics.
Diversification Opportunities for HITACHI STRMACHADR2 and Steel Dynamics
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HITACHI and Steel is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding HITACHI STRMACHADR2 and Steel Dynamics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Dynamics and HITACHI STRMACHADR2 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 HITACHI STRMACHADR2 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 HITACHI STRMACHADR2 i.e., HITACHI STRMACHADR2 and Steel Dynamics go up and down completely randomly.
Pair Corralation between HITACHI STRMACHADR2 and Steel Dynamics
Assuming the 90 days trading horizon HITACHI STRMACHADR2 is expected to generate 2.53 times less return on investment than Steel Dynamics. In addition to that, HITACHI STRMACHADR2 is 1.08 times more volatile than Steel Dynamics. It trades about 0.02 of its total potential returns per unit of risk. Steel Dynamics is currently generating about 0.04 per unit of volatility. If you would invest 9,933 in Steel Dynamics on August 28, 2024 and sell it today you would earn a total of 3,933 from holding Steel Dynamics or generate 39.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HITACHI STRMACHADR2 vs. Steel Dynamics
Performance |
| Timeline |
| HITACHI STRMACHADR2 |
| Steel Dynamics |
HITACHI STRMACHADR2 and Steel Dynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HITACHI STRMACHADR2 and Steel Dynamics
The main advantage of trading using opposite HITACHI STRMACHADR2 and Steel Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HITACHI STRMACHADR2 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' long position.| HITACHI STRMACHADR2 vs. Superior Plus Corp | HITACHI STRMACHADR2 vs. NMI Holdings | HITACHI STRMACHADR2 vs. Origin Agritech | HITACHI STRMACHADR2 vs. SIVERS SEMICONDUCTORS AB |
| Steel Dynamics vs. DICKS Sporting Goods | Steel Dynamics vs. Ming Le Sports | Steel Dynamics vs. PARKEN Sport Entertainment | Steel Dynamics vs. Compagnie Plastic Omnium |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |