Correlation Between Steel Dynamics and Arkha Jayanti
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and Arkha Jayanti 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 Arkha Jayanti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and Arkha Jayanti Persada, you can compare the effects of market volatilities on Steel Dynamics and Arkha Jayanti 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 Arkha Jayanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Arkha Jayanti.
Diversification Opportunities for Steel Dynamics and Arkha Jayanti
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Steel and Arkha is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Arkha Jayanti Persada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arkha Jayanti Persada 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 Arkha Jayanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arkha Jayanti Persada has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Arkha Jayanti go up and down completely randomly.
Pair Corralation between Steel Dynamics and Arkha Jayanti
Given the investment horizon of 90 days Steel Dynamics is expected to under-perform the Arkha Jayanti. But the stock apears to be less risky and, when comparing its historical volatility, Steel Dynamics is 3.86 times less risky than Arkha Jayanti. The stock trades about -0.3 of its potential returns per unit of risk. The Arkha Jayanti Persada is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 1,200 in Arkha Jayanti Persada on September 12, 2024 and sell it today you would earn a total of 700.00 from holding Arkha Jayanti Persada or generate 58.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steel Dynamics vs. Arkha Jayanti Persada
Performance |
| Timeline |
| Steel Dynamics |
| Arkha Jayanti Persada |
Steel Dynamics and Arkha Jayanti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and Arkha Jayanti
The main advantage of trading using opposite Steel Dynamics and Arkha Jayanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, Arkha Jayanti 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 Arkha Jayanti will offset losses from the drop in Arkha Jayanti'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 |
| Arkha Jayanti vs. Berkah Prima Perkasa | Arkha Jayanti vs. Jasnita Telekomindo Tbk | Arkha Jayanti vs. Darmi Bersaudara Tbk | Arkha Jayanti vs. Agro Yasa Lestari |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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