Correlation Between Steel Dynamics and N Citron
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and N Citron 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 Dynamics and N Citron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and N Citron, you can compare the effects of market volatilities on Steel Dynamics and N Citron 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 N Citron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and N Citron.
Diversification Opportunities for Steel Dynamics and N Citron
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Steel and 101400 is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and N Citron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N Citron 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 N Citron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N Citron has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and N Citron go up and down completely randomly.
Pair Corralation between Steel Dynamics and N Citron
Given the investment horizon of 90 days Steel Dynamics is expected to generate 2.21 times more return on investment than N Citron. However, Steel Dynamics is 2.21 times more volatile than N Citron. It trades about 0.13 of its potential returns per unit of risk. N Citron is currently generating about -0.09 per unit of risk. If you would invest 13,358 in Steel Dynamics on September 4, 2024 and sell it today you would earn a total of 1,123 from holding Steel Dynamics or generate 8.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Steel Dynamics vs. N Citron
Performance |
| Timeline |
| Steel Dynamics |
| N Citron |
Steel Dynamics and N Citron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and N Citron
The main advantage of trading using opposite Steel Dynamics and N Citron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, N Citron 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 N Citron will offset losses from the drop in N Citron'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 |
| N Citron vs. Dongsin Engineering Construction | N Citron vs. Doosan Fuel Cell | N Citron vs. Daishin Balance 1 | N Citron vs. Total Soft Bank |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |