Correlation Between Steel Connect and Cardlytics
Can any of the company-specific risk be diversified away by investing in both Steel Connect and Cardlytics 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 Connect and Cardlytics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Connect and Cardlytics, you can compare the effects of market volatilities on Steel Connect and Cardlytics 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 Connect with a short position of Cardlytics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Connect and Cardlytics.
Diversification Opportunities for Steel Connect and Cardlytics
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Steel and Cardlytics is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Steel Connect and Cardlytics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardlytics and Steel Connect 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 Connect are associated (or correlated) with Cardlytics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardlytics has no effect on the direction of Steel Connect i.e., Steel Connect and Cardlytics go up and down completely randomly.
Pair Corralation between Steel Connect and Cardlytics
Given the investment horizon of 90 days Steel Connect is expected to generate 0.29 times more return on investment than Cardlytics. However, Steel Connect is 3.4 times less risky than Cardlytics. It trades about 0.04 of its potential returns per unit of risk. Cardlytics is currently generating about 0.01 per unit of risk. If you would invest 895.00 in Steel Connect on August 27, 2024 and sell it today you would earn a total of 108.00 from holding Steel Connect or generate 12.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steel Connect vs. Cardlytics
Performance |
| Timeline |
| Steel Connect |
| Cardlytics |
Steel Connect and Cardlytics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Connect and Cardlytics
The main advantage of trading using opposite Steel Connect and Cardlytics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Connect position performs unexpectedly, Cardlytics 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 Cardlytics will offset losses from the drop in Cardlytics' long position.| Steel Connect vs. Baosheng Media Group | Steel Connect vs. Impact Fusion International | Steel Connect vs. Mirriad Advertising plc | Steel Connect vs. CyberAgent ADR |
| Cardlytics vs. Criteo Sa | Cardlytics vs. Deluxe | Cardlytics vs. Emerald Expositions Events | Cardlytics vs. Marchex |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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