Correlation Between Steel Dynamics and Argosy Minerals
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and Argosy Minerals 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 Argosy Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and Argosy Minerals Limited, you can compare the effects of market volatilities on Steel Dynamics and Argosy Minerals 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 Argosy Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Argosy Minerals.
Diversification Opportunities for Steel Dynamics and Argosy Minerals
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Steel and Argosy is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Argosy Minerals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argosy Minerals 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 Argosy Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argosy Minerals has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Argosy Minerals go up and down completely randomly.
Pair Corralation between Steel Dynamics and Argosy Minerals
Given the investment horizon of 90 days Steel Dynamics is expected to generate 0.33 times more return on investment than Argosy Minerals. However, Steel Dynamics is 3.03 times less risky than Argosy Minerals. It trades about 0.13 of its potential returns per unit of risk. Argosy Minerals Limited is currently generating about 0.02 per unit of risk. If you would invest 11,837 in Steel Dynamics on August 29, 2024 and sell it today you would earn a total of 2,526 from holding Steel Dynamics or generate 21.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Steel Dynamics vs. Argosy Minerals Limited
Performance |
| Timeline |
| Steel Dynamics |
| Argosy Minerals |
Steel Dynamics and Argosy Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and Argosy Minerals
The main advantage of trading using opposite Steel Dynamics and Argosy Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, Argosy Minerals 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 Argosy Minerals will offset losses from the drop in Argosy Minerals' 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 |
| Argosy Minerals vs. Edison Cobalt Corp | Argosy Minerals vs. Champion Bear Resources | Argosy Minerals vs. Avarone Metals | Argosy Minerals vs. Adriatic Metals PLC |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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