Correlation Between Steel Authority and Investment Trust
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By analyzing existing cross correlation between Steel Authority of and The Investment Trust, you can compare the effects of market volatilities on Steel Authority and Investment Trust 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 Steel Authority with a short position of Investment Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Authority and Investment Trust.
Diversification Opportunities for Steel Authority and Investment Trust
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Steel and Investment is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Steel Authority of and The Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment Trust and Steel Authority 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 Steel Authority of are associated (or correlated) with Investment Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment Trust has no effect on the direction of Steel Authority i.e., Steel Authority and Investment Trust go up and down completely randomly.
Pair Corralation between Steel Authority and Investment Trust
Assuming the 90 days trading horizon Steel Authority of is expected to generate 0.55 times more return on investment than Investment Trust. However, Steel Authority of is 1.81 times less risky than Investment Trust. It trades about 0.36 of its potential returns per unit of risk. The Investment Trust is currently generating about 0.01 per unit of risk. If you would invest 11,589 in Steel Authority of on September 12, 2024 and sell it today you would earn a total of 1,092 from holding Steel Authority of or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Steel Authority of vs. The Investment Trust
Performance |
| Timeline |
| Steel Authority |
| Investment Trust |
Steel Authority and Investment Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Authority and Investment Trust
The main advantage of trading using opposite Steel Authority and Investment Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Authority position performs unexpectedly, Investment Trust 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 Investment Trust will offset losses from the drop in Investment Trust's long position.| Steel Authority vs. Embassy Office Parks | Steel Authority vs. Indian Metals Ferro | Steel Authority vs. JTL Industries |
| Investment Trust vs. Steel Authority of | Investment Trust vs. Vibhor Steel Tubes | Investment Trust vs. Visa Steel Limited | Investment Trust vs. The Federal Bank |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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