Correlation Between Steel Dynamics and Absa Multi
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By analyzing existing cross correlation between Steel Dynamics and Absa Multi Managed, you can compare the effects of market volatilities on Steel Dynamics and Absa Multi 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 Dynamics with a short position of Absa Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Absa Multi.
Diversification Opportunities for Steel Dynamics and Absa Multi
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Steel and Absa is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Absa Multi Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absa Multi Managed and Steel Dynamics 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 Dynamics are associated (or correlated) with Absa Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absa Multi Managed has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Absa Multi go up and down completely randomly.
Pair Corralation between Steel Dynamics and Absa Multi
Given the investment horizon of 90 days Steel Dynamics is expected to generate 5.09 times more return on investment than Absa Multi. However, Steel Dynamics is 5.09 times more volatile than Absa Multi Managed. It trades about 0.04 of its potential returns per unit of risk. Absa Multi Managed is currently generating about 0.1 per unit of risk. If you would invest 9,963 in Steel Dynamics on September 13, 2024 and sell it today you would earn a total of 3,392 from holding Steel Dynamics or generate 34.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.99% |
| Values | Daily Returns |
Steel Dynamics vs. Absa Multi Managed
Performance |
| Timeline |
| Steel Dynamics |
| Absa Multi Managed |
Steel Dynamics and Absa Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and Absa Multi
The main advantage of trading using opposite Steel Dynamics and Absa Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, Absa Multi 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 Absa Multi will offset losses from the drop in Absa Multi's long position.| Steel Dynamics vs. Cleveland Cliffs | Steel Dynamics vs. United States Steel | Steel Dynamics vs. ArcelorMittal SA ADR | Steel Dynamics vs. Reliance Steel Aluminum |
| Absa Multi vs. Absa Multi managed Absolute | Absa Multi vs. Absa Prudential | Absa Multi vs. Absa Multi Managed | Absa Multi vs. Absa Multi Managed |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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