Correlation Between Steel Dynamics and Ninepoint Bitcoin
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and Ninepoint Bitcoin 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 Ninepoint Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and Ninepoint Bitcoin ETF, you can compare the effects of market volatilities on Steel Dynamics and Ninepoint Bitcoin 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 Ninepoint Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Ninepoint Bitcoin.
Diversification Opportunities for Steel Dynamics and Ninepoint Bitcoin
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Steel and Ninepoint is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Ninepoint Bitcoin ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ninepoint Bitcoin ETF 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 Ninepoint Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ninepoint Bitcoin ETF has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Ninepoint Bitcoin go up and down completely randomly.
Pair Corralation between Steel Dynamics and Ninepoint Bitcoin
Given the investment horizon of 90 days Steel Dynamics is expected to generate 2.58 times less return on investment than Ninepoint Bitcoin. In addition to that, Steel Dynamics is 1.0 times more volatile than Ninepoint Bitcoin ETF. It trades about 0.04 of its total potential returns per unit of risk. Ninepoint Bitcoin ETF is currently generating about 0.11 per unit of volatility. If you would invest 1,266 in Ninepoint Bitcoin ETF on September 3, 2024 and sell it today you would earn a total of 451.00 from holding Ninepoint Bitcoin ETF or generate 35.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.32% |
| Values | Daily Returns |
Steel Dynamics vs. Ninepoint Bitcoin ETF
Performance |
| Timeline |
| Steel Dynamics |
| Ninepoint Bitcoin ETF |
Steel Dynamics and Ninepoint Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and Ninepoint Bitcoin
The main advantage of trading using opposite Steel Dynamics and Ninepoint Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, Ninepoint Bitcoin 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 Ninepoint Bitcoin will offset losses from the drop in Ninepoint Bitcoin'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 |
| Ninepoint Bitcoin vs. Ninepoint Energy | Ninepoint Bitcoin vs. Ninepoint Bitcoin ETF | Ninepoint Bitcoin vs. Ninepoint Web3 Innovators | Ninepoint Bitcoin vs. Ninepoint Energy Income |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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