Correlation Between Russel Metals and Finning International
Can any of the company-specific risk be diversified away by investing in both Russel Metals and Finning International 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 Russel Metals and Finning International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Russel Metals and Finning International, you can compare the effects of market volatilities on Russel Metals and Finning International 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 Russel Metals with a short position of Finning International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Russel Metals and Finning International.
Diversification Opportunities for Russel Metals and Finning International
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Russel and Finning is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Russel Metals and Finning International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finning International and Russel Metals 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 Russel Metals are associated (or correlated) with Finning International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finning International has no effect on the direction of Russel Metals i.e., Russel Metals and Finning International go up and down completely randomly.
Pair Corralation between Russel Metals and Finning International
Assuming the 90 days trading horizon Russel Metals is expected to under-perform the Finning International. In addition to that, Russel Metals is 1.15 times more volatile than Finning International. It trades about -0.14 of its total potential returns per unit of risk. Finning International is currently generating about 0.07 per unit of volatility. If you would invest 3,740 in Finning International on October 21, 2024 and sell it today you would earn a total of 44.00 from holding Finning International or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Russel Metals vs. Finning International
Performance |
| Timeline |
| Russel Metals |
| Finning International |
Russel Metals and Finning International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Russel Metals and Finning International
The main advantage of trading using opposite Russel Metals and Finning International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Russel Metals position performs unexpectedly, Finning International 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 Finning International will offset losses from the drop in Finning International's long position.| Russel Metals vs. Finning International | Russel Metals vs. Transcontinental | Russel Metals vs. Toromont Industries | Russel Metals vs. IGM Financial |
| Finning International vs. Toromont Industries | Finning International vs. Ritchie Bros Auctioneers | Finning International vs. Stantec | Finning International vs. Transcontinental |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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