Correlation Between Schnitzer Steel and RETAIL FOOD
Can any of the company-specific risk be diversified away by investing in both Schnitzer Steel and RETAIL FOOD 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 Schnitzer Steel and RETAIL FOOD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schnitzer Steel Industries and RETAIL FOOD GROUP, you can compare the effects of market volatilities on Schnitzer Steel and RETAIL FOOD 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 Schnitzer Steel with a short position of RETAIL FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schnitzer Steel and RETAIL FOOD.
Diversification Opportunities for Schnitzer Steel and RETAIL FOOD
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Schnitzer and RETAIL is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Schnitzer Steel Industries and RETAIL FOOD GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RETAIL FOOD GROUP and Schnitzer Steel 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 Schnitzer Steel Industries are associated (or correlated) with RETAIL FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RETAIL FOOD GROUP has no effect on the direction of Schnitzer Steel i.e., Schnitzer Steel and RETAIL FOOD go up and down completely randomly.
Pair Corralation between Schnitzer Steel and RETAIL FOOD
Assuming the 90 days trading horizon Schnitzer Steel Industries is expected to under-perform the RETAIL FOOD. In addition to that, Schnitzer Steel is 1.62 times more volatile than RETAIL FOOD GROUP. It trades about -0.46 of its total potential returns per unit of risk. RETAIL FOOD GROUP is currently generating about -0.3 per unit of volatility. If you would invest 156.00 in RETAIL FOOD GROUP on October 13, 2024 and sell it today you would lose (28.00) from holding RETAIL FOOD GROUP or give up 17.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.44% |
| Values | Daily Returns |
Schnitzer Steel Industries vs. RETAIL FOOD GROUP
Performance |
| Timeline |
| Schnitzer Steel Indu |
| RETAIL FOOD GROUP |
Schnitzer Steel and RETAIL FOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schnitzer Steel and RETAIL FOOD
The main advantage of trading using opposite Schnitzer Steel and RETAIL FOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schnitzer Steel position performs unexpectedly, RETAIL FOOD 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 RETAIL FOOD will offset losses from the drop in RETAIL FOOD's long position.| Schnitzer Steel vs. RETAIL FOOD GROUP | Schnitzer Steel vs. FAST RETAIL ADR | Schnitzer Steel vs. BII Railway Transportation | Schnitzer Steel vs. ANTA SPORTS PRODUCT |
| RETAIL FOOD vs. Thai Beverage Public | RETAIL FOOD vs. National Beverage Corp | RETAIL FOOD vs. Casio Computer CoLtd | RETAIL FOOD vs. HEMISPHERE EGY |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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