Correlation Between Steel Dynamics and Chugai Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and Chugai Pharmaceutical 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 Chugai Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and Chugai Pharmaceutical Co, you can compare the effects of market volatilities on Steel Dynamics and Chugai Pharmaceutical 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 Chugai Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Chugai Pharmaceutical.
Diversification Opportunities for Steel Dynamics and Chugai Pharmaceutical
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Steel and Chugai is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Chugai Pharmaceutical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chugai Pharmaceutical 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 Chugai Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chugai Pharmaceutical has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Chugai Pharmaceutical go up and down completely randomly.
Pair Corralation between Steel Dynamics and Chugai Pharmaceutical
Given the investment horizon of 90 days Steel Dynamics is expected to generate 0.99 times more return on investment than Chugai Pharmaceutical. However, Steel Dynamics is 1.01 times less risky than Chugai Pharmaceutical. It trades about 0.16 of its potential returns per unit of risk. Chugai Pharmaceutical Co is currently generating about -0.05 per unit of risk. If you would invest 11,354 in Steel Dynamics on August 31, 2024 and sell it today you would earn a total of 3,029 from holding Steel Dynamics or generate 26.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steel Dynamics vs. Chugai Pharmaceutical Co
Performance |
| Timeline |
| Steel Dynamics |
| Chugai Pharmaceutical |
Steel Dynamics and Chugai Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and Chugai Pharmaceutical
The main advantage of trading using opposite Steel Dynamics and Chugai Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, Chugai Pharmaceutical 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 Chugai Pharmaceutical will offset losses from the drop in Chugai Pharmaceutical'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 |
| Chugai Pharmaceutical vs. Scilex Holding | Chugai Pharmaceutical vs. Merck Company | Chugai Pharmaceutical vs. Johnson Johnson | Chugai Pharmaceutical vs. Pfizer Inc |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |