Correlation Between STRAYER EDUCATION and Nucor
Can any of the company-specific risk be diversified away by investing in both STRAYER EDUCATION and Nucor 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 STRAYER EDUCATION and Nucor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRAYER EDUCATION and Nucor, you can compare the effects of market volatilities on STRAYER EDUCATION 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 STRAYER EDUCATION with a short position of Nucor. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRAYER EDUCATION and Nucor.
Diversification Opportunities for STRAYER EDUCATION and Nucor
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between STRAYER and Nucor is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding STRAYER EDUCATION and Nucor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nucor and STRAYER EDUCATION 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 STRAYER EDUCATION 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 has no effect on the direction of STRAYER EDUCATION i.e., STRAYER EDUCATION and Nucor go up and down completely randomly.
Pair Corralation between STRAYER EDUCATION and Nucor
Assuming the 90 days trading horizon STRAYER EDUCATION is expected to generate 1.02 times more return on investment than Nucor. However, STRAYER EDUCATION is 1.02 times more volatile than Nucor. It trades about 0.05 of its potential returns per unit of risk. Nucor is currently generating about 0.02 per unit of risk. If you would invest 6,856 in STRAYER EDUCATION on September 1, 2024 and sell it today you would earn a total of 2,544 from holding STRAYER EDUCATION or generate 37.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
STRAYER EDUCATION vs. Nucor
Performance |
| Timeline |
| STRAYER EDUCATION |
| Nucor |
STRAYER EDUCATION and Nucor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRAYER EDUCATION and Nucor
The main advantage of trading using opposite STRAYER EDUCATION and Nucor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRAYER EDUCATION 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.| STRAYER EDUCATION vs. SIVERS SEMICONDUCTORS AB | STRAYER EDUCATION vs. Darden Restaurants | STRAYER EDUCATION vs. Reliance Steel Aluminum | STRAYER EDUCATION vs. Q2M Managementberatung AG |
| Nucor vs. BW OFFSHORE LTD | Nucor vs. PennyMac Mortgage Investment | Nucor vs. HK Electric Investments | Nucor vs. Strategic Investments AS |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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