Correlation Between Steel Dynamics and Xilinmen Furniture
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By analyzing existing cross correlation between Steel Dynamics and Xilinmen Furniture Co, you can compare the effects of market volatilities on Steel Dynamics and Xilinmen Furniture 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 Xilinmen Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Xilinmen Furniture.
Diversification Opportunities for Steel Dynamics and Xilinmen Furniture
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Steel and Xilinmen is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Xilinmen Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilinmen Furniture 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 Xilinmen Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilinmen Furniture has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Xilinmen Furniture go up and down completely randomly.
Pair Corralation between Steel Dynamics and Xilinmen Furniture
Given the investment horizon of 90 days Steel Dynamics is expected to generate 0.79 times more return on investment than Xilinmen Furniture. However, Steel Dynamics is 1.26 times less risky than Xilinmen Furniture. It trades about 0.06 of its potential returns per unit of risk. Xilinmen Furniture Co is currently generating about 0.01 per unit of risk. If you would invest 12,623 in Steel Dynamics on September 3, 2024 and sell it today you would earn a total of 1,904 from holding Steel Dynamics or generate 15.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.8% |
| Values | Daily Returns |
Steel Dynamics vs. Xilinmen Furniture Co
Performance |
| Timeline |
| Steel Dynamics |
| Xilinmen Furniture |
Steel Dynamics and Xilinmen Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and Xilinmen Furniture
The main advantage of trading using opposite Steel Dynamics and Xilinmen Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, Xilinmen Furniture 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 Xilinmen Furniture will offset losses from the drop in Xilinmen Furniture'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 |
| Xilinmen Furniture vs. Tongxing Environmental Protection | Xilinmen Furniture vs. Ningbo Ligong Online | Xilinmen Furniture vs. Guangdong Advertising Co | Xilinmen Furniture vs. Bengang Steel Plates |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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