Correlation Between Nucor and Klckner Co
Can any of the company-specific risk be diversified away by investing in both Nucor and Klckner Co 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 Nucor and Klckner Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nucor and Klckner Co SE, you can compare the effects of market volatilities on Nucor and Klckner Co 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 Nucor with a short position of Klckner Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nucor and Klckner Co.
Diversification Opportunities for Nucor and Klckner Co
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nucor and Klckner is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Nucor and Klckner Co SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klckner Co SE and Nucor 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 Nucor are associated (or correlated) with Klckner Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klckner Co SE has no effect on the direction of Nucor i.e., Nucor and Klckner Co go up and down completely randomly.
Pair Corralation between Nucor and Klckner Co
Assuming the 90 days horizon Nucor is expected to generate 2.19 times more return on investment than Klckner Co. However, Nucor is 2.19 times more volatile than Klckner Co SE. It trades about 0.09 of its potential returns per unit of risk. Klckner Co SE is currently generating about 0.03 per unit of risk. If you would invest 13,654 in Nucor on August 27, 2024 and sell it today you would earn a total of 926.00 from holding Nucor or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nucor vs. Klckner Co SE
Performance |
| Timeline |
| Nucor |
| Klckner Co SE |
Nucor and Klckner Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nucor and Klckner Co
The main advantage of trading using opposite Nucor and Klckner Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nucor position performs unexpectedly, Klckner Co 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 Klckner Co will offset losses from the drop in Klckner Co's long position.| Nucor vs. SHIP HEALTHCARE HLDGINC | Nucor vs. ATRYS HEALTH SA | Nucor vs. National Health Investors | Nucor vs. MICRONIC MYDATA |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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