Correlation Between Reliance Steel and Gulf Resources
Can any of the company-specific risk be diversified away by investing in both Reliance Steel and Gulf Resources 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 Reliance Steel and Gulf Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reliance Steel Aluminum and Gulf Resources, you can compare the effects of market volatilities on Reliance Steel and Gulf Resources 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 Reliance Steel with a short position of Gulf Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reliance Steel and Gulf Resources.
Diversification Opportunities for Reliance Steel and Gulf Resources
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Reliance and Gulf is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Reliance Steel Aluminum and Gulf Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulf Resources and Reliance 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 Reliance Steel Aluminum are associated (or correlated) with Gulf Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulf Resources has no effect on the direction of Reliance Steel i.e., Reliance Steel and Gulf Resources go up and down completely randomly.
Pair Corralation between Reliance Steel and Gulf Resources
Allowing for the 90-day total investment horizon Reliance Steel Aluminum is expected to generate 0.45 times more return on investment than Gulf Resources. However, Reliance Steel Aluminum is 2.22 times less risky than Gulf Resources. It trades about 0.17 of its potential returns per unit of risk. Gulf Resources is currently generating about -0.09 per unit of risk. If you would invest 28,263 in Reliance Steel Aluminum on August 24, 2024 and sell it today you would earn a total of 3,380 from holding Reliance Steel Aluminum or generate 11.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reliance Steel Aluminum vs. Gulf Resources
Performance |
| Timeline |
| Reliance Steel Aluminum |
| Gulf Resources |
Reliance Steel and Gulf Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reliance Steel and Gulf Resources
The main advantage of trading using opposite Reliance Steel and Gulf Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reliance Steel position performs unexpectedly, Gulf Resources 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 Gulf Resources will offset losses from the drop in Gulf Resources' long position.| Reliance Steel vs. Universal Stainless Alloy | Reliance Steel vs. Outokumpu Oyj ADR | Reliance Steel vs. Olympic Steel | Reliance Steel vs. POSCO Holdings |
| Gulf Resources vs. Energy and Environmental | Gulf Resources vs. Alumifuel Pwr Corp | Gulf Resources vs. First Graphene | Gulf Resources vs. ASP Isotopes Common |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |