Correlation Between Sea and NUCOR
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By analyzing existing cross correlation between Sea and NUCOR P 52, you can compare the effects of market volatilities on Sea and NUCOR 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 Sea with a short position of NUCOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea and NUCOR.
Diversification Opportunities for Sea and NUCOR
Good diversification
The 3 months correlation between Sea and NUCOR is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sea and NUCOR P 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NUCOR P 52 and Sea 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 Sea are associated (or correlated) with NUCOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NUCOR P 52 has no effect on the direction of Sea i.e., Sea and NUCOR go up and down completely randomly.
Pair Corralation between Sea and NUCOR
Allowing for the 90-day total investment horizon Sea is expected to generate 1.85 times more return on investment than NUCOR. However, Sea is 1.85 times more volatile than NUCOR P 52. It trades about 0.18 of its potential returns per unit of risk. NUCOR P 52 is currently generating about 0.11 per unit of risk. If you would invest 10,765 in Sea on September 13, 2024 and sell it today you would earn a total of 964.00 from holding Sea or generate 8.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 22.73% |
| Values | Daily Returns |
Sea vs. NUCOR P 52
Performance |
| Timeline |
| Sea |
| NUCOR P 52 |
Sea and NUCOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea and NUCOR
The main advantage of trading using opposite Sea and NUCOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea position performs unexpectedly, NUCOR 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 NUCOR will offset losses from the drop in NUCOR's long position.The idea behind Sea and NUCOR P 52 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| NUCOR vs. Valneva SE ADR | NUCOR vs. East Africa Metals | NUCOR vs. Nuvalent | NUCOR vs. Red Branch Technologies |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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