Correlation Between KENEDIX OFFICE and Steel Dynamics
Can any of the company-specific risk be diversified away by investing in both KENEDIX OFFICE 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 KENEDIX OFFICE and Steel Dynamics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KENEDIX OFFICE INV and Steel Dynamics, you can compare the effects of market volatilities on KENEDIX OFFICE 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 KENEDIX OFFICE with a short position of Steel Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENEDIX OFFICE and Steel Dynamics.
Diversification Opportunities for KENEDIX OFFICE and Steel Dynamics
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KENEDIX and Steel is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding KENEDIX OFFICE INV and Steel Dynamics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Dynamics and KENEDIX OFFICE 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 KENEDIX OFFICE INV 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 KENEDIX OFFICE i.e., KENEDIX OFFICE and Steel Dynamics go up and down completely randomly.
Pair Corralation between KENEDIX OFFICE and Steel Dynamics
Assuming the 90 days horizon KENEDIX OFFICE INV is expected to under-perform the Steel Dynamics. But the stock apears to be less risky and, when comparing its historical volatility, KENEDIX OFFICE INV is 2.0 times less risky than Steel Dynamics. The stock trades about 0.0 of its potential returns per unit of risk. The Steel Dynamics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 11,062 in Steel Dynamics on September 13, 2024 and sell it today you would earn a total of 1,670 from holding Steel Dynamics or generate 15.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KENEDIX OFFICE INV vs. Steel Dynamics
Performance |
| Timeline |
| KENEDIX OFFICE INV |
| Steel Dynamics |
KENEDIX OFFICE and Steel Dynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KENEDIX OFFICE and Steel Dynamics
The main advantage of trading using opposite KENEDIX OFFICE and Steel Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENEDIX OFFICE 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.| KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc |
| Steel Dynamics vs. KENEDIX OFFICE INV | Steel Dynamics vs. MTI WIRELESS EDGE | Steel Dynamics vs. BJs Restaurants | Steel Dynamics vs. Internet Thailand PCL |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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