Correlation Between Schnitzer Steel and Universal Stainless
Can any of the company-specific risk be diversified away by investing in both Schnitzer Steel 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 Schnitzer Steel and Universal Stainless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schnitzer Steel Industries and Universal Stainless Alloy, you can compare the effects of market volatilities on Schnitzer Steel 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 Schnitzer Steel with a short position of Universal Stainless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schnitzer Steel and Universal Stainless.
Diversification Opportunities for Schnitzer Steel and Universal Stainless
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Schnitzer and Universal is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Schnitzer Steel Industries 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 Schnitzer Steel 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 Schnitzer Steel Industries 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 Schnitzer Steel i.e., Schnitzer Steel and Universal Stainless go up and down completely randomly.
Pair Corralation between Schnitzer Steel and Universal Stainless
Given the investment horizon of 90 days Schnitzer Steel Industries is expected to under-perform the Universal Stainless. But the stock apears to be less risky and, when comparing its historical volatility, Schnitzer Steel Industries is 1.06 times less risky than Universal Stainless. The stock trades about -0.03 of its potential returns per unit of risk. The Universal Stainless Alloy is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,490 in Universal Stainless Alloy on September 12, 2024 and sell it today you would earn a total of 2,932 from holding Universal Stainless Alloy or generate 196.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schnitzer Steel Industries vs. Universal Stainless Alloy
Performance |
| Timeline |
| Schnitzer Steel Indu |
| Universal Stainless Alloy |
Schnitzer Steel and Universal Stainless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schnitzer Steel and Universal Stainless
The main advantage of trading using opposite Schnitzer Steel and Universal Stainless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schnitzer Steel 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.| Schnitzer Steel vs. Universal Stainless Alloy | Schnitzer Steel vs. Outokumpu Oyj ADR | Schnitzer Steel vs. Usinas Siderurgicas de | Schnitzer Steel 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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