Correlation Between Reliance Steel and Hastings Technology
Can any of the company-specific risk be diversified away by investing in both Reliance Steel and Hastings Technology 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 Hastings Technology 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 Hastings Technology Metals, you can compare the effects of market volatilities on Reliance Steel and Hastings Technology 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 Hastings Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reliance Steel and Hastings Technology.
Diversification Opportunities for Reliance Steel and Hastings Technology
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Reliance and Hastings is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Reliance Steel Aluminum and Hastings Technology Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hastings Technology 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 Hastings Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hastings Technology has no effect on the direction of Reliance Steel i.e., Reliance Steel and Hastings Technology go up and down completely randomly.
Pair Corralation between Reliance Steel and Hastings Technology
Assuming the 90 days horizon Reliance Steel Aluminum is expected to generate 0.24 times more return on investment than Hastings Technology. However, Reliance Steel Aluminum is 4.23 times less risky than Hastings Technology. It trades about 0.06 of its potential returns per unit of risk. Hastings Technology Metals is currently generating about -0.03 per unit of risk. If you would invest 21,195 in Reliance Steel Aluminum on August 31, 2024 and sell it today you would earn a total of 9,405 from holding Reliance Steel Aluminum or generate 44.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reliance Steel Aluminum vs. Hastings Technology Metals
Performance |
| Timeline |
| Reliance Steel Aluminum |
| Hastings Technology |
Reliance Steel and Hastings Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reliance Steel and Hastings Technology
The main advantage of trading using opposite Reliance Steel and Hastings Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reliance Steel position performs unexpectedly, Hastings Technology 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 Hastings Technology will offset losses from the drop in Hastings Technology's long position.| Reliance Steel vs. ArcelorMittal SA | Reliance Steel vs. Nippon Steel | Reliance Steel vs. POSCO Holdings | Reliance Steel vs. Toyota Tsusho |
| Hastings Technology vs. BHP Group Limited | Hastings Technology vs. BHP Group Limited | Hastings Technology vs. Rio Tinto Group | Hastings Technology vs. Rio Tinto Group |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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