Correlation Between Steel Dynamics and COSMOSTEEL HLDGS
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and COSMOSTEEL HLDGS 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 Steel Dynamics and COSMOSTEEL HLDGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and COSMOSTEEL HLDGS, you can compare the effects of market volatilities on Steel Dynamics and COSMOSTEEL HLDGS 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 Dynamics with a short position of COSMOSTEEL HLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and COSMOSTEEL HLDGS.
Diversification Opportunities for Steel Dynamics and COSMOSTEEL HLDGS
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Steel and COSMOSTEEL is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and COSMOSTEEL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMOSTEEL HLDGS and Steel Dynamics 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 Dynamics are associated (or correlated) with COSMOSTEEL HLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSMOSTEEL HLDGS has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and COSMOSTEEL HLDGS go up and down completely randomly.
Pair Corralation between Steel Dynamics and COSMOSTEEL HLDGS
Assuming the 90 days horizon Steel Dynamics is expected to generate 0.7 times more return on investment than COSMOSTEEL HLDGS. However, Steel Dynamics is 1.43 times less risky than COSMOSTEEL HLDGS. It trades about 0.04 of its potential returns per unit of risk. COSMOSTEEL HLDGS is currently generating about 0.0 per unit of risk. If you would invest 9,963 in Steel Dynamics on September 4, 2024 and sell it today you would earn a total of 3,513 from holding Steel Dynamics or generate 35.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steel Dynamics vs. COSMOSTEEL HLDGS
Performance |
| Timeline |
| Steel Dynamics |
| COSMOSTEEL HLDGS |
Steel Dynamics and COSMOSTEEL HLDGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and COSMOSTEEL HLDGS
The main advantage of trading using opposite Steel Dynamics and COSMOSTEEL HLDGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS will offset losses from the drop in COSMOSTEEL HLDGS's long position.| Steel Dynamics vs. BII Railway Transportation | Steel Dynamics vs. Air Transport Services | Steel Dynamics vs. DEVRY EDUCATION GRP | Steel Dynamics vs. DeVry Education Group |
| COSMOSTEEL HLDGS vs. TOTAL GABON | COSMOSTEEL HLDGS vs. Walgreens Boots Alliance | COSMOSTEEL HLDGS vs. Peak Resources Limited |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |