Correlation Between Steel Dynamics and Asia Pptys
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and Asia Pptys 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 Asia Pptys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and Asia Pptys, you can compare the effects of market volatilities on Steel Dynamics and Asia Pptys 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 Asia Pptys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Asia Pptys.
Diversification Opportunities for Steel Dynamics and Asia Pptys
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Steel and Asia is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Asia Pptys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Pptys 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 Asia Pptys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Pptys has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Asia Pptys go up and down completely randomly.
Pair Corralation between Steel Dynamics and Asia Pptys
Given the investment horizon of 90 days Steel Dynamics is expected to generate 15.59 times less return on investment than Asia Pptys. But when comparing it to its historical volatility, Steel Dynamics is 9.62 times less risky than Asia Pptys. It trades about 0.06 of its potential returns per unit of risk. Asia Pptys is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2.01 in Asia Pptys on August 24, 2024 and sell it today you would earn a total of 2.99 from holding Asia Pptys or generate 148.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Steel Dynamics vs. Asia Pptys
Performance |
| Timeline |
| Steel Dynamics |
| Asia Pptys |
Steel Dynamics and Asia Pptys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and Asia Pptys
The main advantage of trading using opposite Steel Dynamics and Asia Pptys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, Asia Pptys 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 Asia Pptys will offset losses from the drop in Asia Pptys' long position.| Steel Dynamics vs. Cleveland Cliffs | Steel Dynamics vs. United States Steel | Steel Dynamics vs. Reliance Steel Aluminum | Steel Dynamics vs. Nucor Corp |
| Asia Pptys vs. IRSA Inversiones Y | Asia Pptys vs. Anywhere Real Estate | Asia Pptys vs. Newmark Group | Asia Pptys vs. Wharf Real Estate |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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