Correlation Between Steel Dynamics and Dhler SA
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and Dhler SA 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 Dhler SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and Dhler SA, you can compare the effects of market volatilities on Steel Dynamics and Dhler SA 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 Dhler SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Dhler SA.
Diversification Opportunities for Steel Dynamics and Dhler SA
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Steel and Dhler is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Dhler SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dhler SA 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 Dhler SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dhler SA has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Dhler SA go up and down completely randomly.
Pair Corralation between Steel Dynamics and Dhler SA
Given the investment horizon of 90 days Steel Dynamics is expected to under-perform the Dhler SA. In addition to that, Steel Dynamics is 1.51 times more volatile than Dhler SA. It trades about -0.26 of its total potential returns per unit of risk. Dhler SA is currently generating about 0.15 per unit of volatility. If you would invest 399.00 in Dhler SA on September 13, 2024 and sell it today you would earn a total of 11.00 from holding Dhler SA or generate 2.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Steel Dynamics vs. Dhler SA
Performance |
| Timeline |
| Steel Dynamics |
| Dhler SA |
Steel Dynamics and Dhler SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and Dhler SA
The main advantage of trading using opposite Steel Dynamics and Dhler SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, Dhler SA 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 Dhler SA will offset losses from the drop in Dhler SA'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 |
| Dhler SA vs. Companhia de Tecidos | Dhler SA vs. Electro Ao Altona | Dhler SA vs. Companhia Tecidos Santanense | Dhler SA vs. Grazziotin SA |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |