Correlation Between Steel Dynamics and Columbia Emerging
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and Columbia Emerging 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 Columbia Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and Columbia Emerging Markets, you can compare the effects of market volatilities on Steel Dynamics and Columbia Emerging 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 Columbia Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Columbia Emerging.
Diversification Opportunities for Steel Dynamics and Columbia Emerging
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Steel and Columbia is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Columbia Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Emerging Markets 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 Columbia Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Emerging Markets has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Columbia Emerging go up and down completely randomly.
Pair Corralation between Steel Dynamics and Columbia Emerging
Given the investment horizon of 90 days Steel Dynamics is expected to generate 2.34 times more return on investment than Columbia Emerging. However, Steel Dynamics is 2.34 times more volatile than Columbia Emerging Markets. It trades about 0.04 of its potential returns per unit of risk. Columbia Emerging Markets is currently generating about 0.03 per unit of risk. If you would invest 10,552 in Steel Dynamics on September 4, 2024 and sell it today you would earn a total of 3,929 from holding Steel Dynamics or generate 37.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Steel Dynamics vs. Columbia Emerging Markets
Performance |
| Timeline |
| Steel Dynamics |
| Columbia Emerging Markets |
Steel Dynamics and Columbia Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and Columbia Emerging
The main advantage of trading using opposite Steel Dynamics and Columbia Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, Columbia Emerging 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 Columbia Emerging will offset losses from the drop in Columbia Emerging'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 |
| Columbia Emerging vs. Columbia Large Cap | Columbia Emerging vs. Columbia Trarian Core | Columbia Emerging vs. Columbia Dividend Opportunity | Columbia Emerging vs. Columbia Seligman Global |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Stocks Directory Find actively traded stocks across global markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |