Correlation Between Schnitzer Steel and SPORTING
Can any of the company-specific risk be diversified away by investing in both Schnitzer Steel and SPORTING 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 SPORTING 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 SPORTING, you can compare the effects of market volatilities on Schnitzer Steel and SPORTING 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 SPORTING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schnitzer Steel and SPORTING.
Diversification Opportunities for Schnitzer Steel and SPORTING
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Schnitzer and SPORTING is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Schnitzer Steel Industries and SPORTING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPORTING 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 SPORTING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPORTING has no effect on the direction of Schnitzer Steel i.e., Schnitzer Steel and SPORTING go up and down completely randomly.
Pair Corralation between Schnitzer Steel and SPORTING
Assuming the 90 days trading horizon Schnitzer Steel Industries is expected to under-perform the SPORTING. In addition to that, Schnitzer Steel is 1.49 times more volatile than SPORTING. It trades about -0.03 of its total potential returns per unit of risk. SPORTING is currently generating about 0.03 per unit of volatility. If you would invest 78.00 in SPORTING on October 12, 2024 and sell it today you would earn a total of 14.00 from holding SPORTING or generate 17.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schnitzer Steel Industries vs. SPORTING
Performance |
| Timeline |
| Schnitzer Steel Indu |
| SPORTING |
Schnitzer Steel and SPORTING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schnitzer Steel and SPORTING
The main advantage of trading using opposite Schnitzer Steel and SPORTING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schnitzer Steel position performs unexpectedly, SPORTING 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 SPORTING will offset losses from the drop in SPORTING's long position.| Schnitzer Steel vs. JSC Halyk bank | Schnitzer Steel vs. CDN IMPERIAL BANK | Schnitzer Steel vs. TRADEDOUBLER AB SK | Schnitzer Steel vs. Synovus Financial Corp |
| SPORTING vs. Insteel Industries | SPORTING vs. PT Steel Pipe | SPORTING vs. Taylor Morrison Home | SPORTING vs. Schnitzer Steel Industries |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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