Correlation Between Steel Dynamics and Huatai Securities
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By analyzing existing cross correlation between Steel Dynamics and Huatai Securities Co, you can compare the effects of market volatilities on Steel Dynamics and Huatai Securities 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 Huatai Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Huatai Securities.
Diversification Opportunities for Steel Dynamics and Huatai Securities
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Steel and Huatai is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Huatai Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huatai Securities 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 Huatai Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huatai Securities has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Huatai Securities go up and down completely randomly.
Pair Corralation between Steel Dynamics and Huatai Securities
Given the investment horizon of 90 days Steel Dynamics is expected to under-perform the Huatai Securities. But the stock apears to be less risky and, when comparing its historical volatility, Steel Dynamics is 1.13 times less risky than Huatai Securities. The stock trades about -0.3 of its potential returns per unit of risk. The Huatai Securities Co is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 1,963 in Huatai Securities Co on September 12, 2024 and sell it today you would lose (119.00) from holding Huatai Securities Co or give up 6.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Steel Dynamics vs. Huatai Securities Co
Performance |
| Timeline |
| Steel Dynamics |
| Huatai Securities |
Steel Dynamics and Huatai Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and Huatai Securities
The main advantage of trading using opposite Steel Dynamics and Huatai Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, Huatai Securities 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 Huatai Securities will offset losses from the drop in Huatai Securities' 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 |
| Huatai Securities vs. Shanghai Yanpu Metal | Huatai Securities vs. Huaxia Fund Management | Huatai Securities vs. Shandong Mining Machinery | Huatai Securities vs. Dalian Thermal Power |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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