Correlation Between Steel Dynamics and Cooper Tire
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and Cooper Tire 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 Cooper Tire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and Cooper Tire Rubber, you can compare the effects of market volatilities on Steel Dynamics and Cooper Tire 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 Cooper Tire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Cooper Tire.
Diversification Opportunities for Steel Dynamics and Cooper Tire
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Steel and Cooper is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Cooper Tire Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Tire Rubber 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 Cooper Tire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cooper Tire Rubber has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Cooper Tire go up and down completely randomly.
Pair Corralation between Steel Dynamics and Cooper Tire
If you would invest (100.00) in Cooper Tire Rubber on September 13, 2024 and sell it today you would earn a total of 100.00 from holding Cooper Tire Rubber or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Steel Dynamics vs. Cooper Tire Rubber
Performance |
| Timeline |
| Steel Dynamics |
| Cooper Tire Rubber |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Steel Dynamics and Cooper Tire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and Cooper Tire
The main advantage of trading using opposite Steel Dynamics and Cooper Tire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, Cooper Tire 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 Cooper Tire will offset losses from the drop in Cooper Tire'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 |
| Cooper Tire vs. FitLife Brands, Common | Cooper Tire vs. ServiceNow | Cooper Tire vs. Sapiens International | Cooper Tire vs. Bridgford Foods |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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