Correlation Between Steel Dynamics and Strategic Advisers
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and Strategic Advisers 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 Strategic Advisers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and Strategic Advisers Fidelity, you can compare the effects of market volatilities on Steel Dynamics and Strategic Advisers 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 Strategic Advisers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Strategic Advisers.
Diversification Opportunities for Steel Dynamics and Strategic Advisers
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Steel and Strategic is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Strategic Advisers Fidelity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Advisers 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 Strategic Advisers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Advisers has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Strategic Advisers go up and down completely randomly.
Pair Corralation between Steel Dynamics and Strategic Advisers
Given the investment horizon of 90 days Steel Dynamics is expected to generate 2.5 times more return on investment than Strategic Advisers. However, Steel Dynamics is 2.5 times more volatile than Strategic Advisers Fidelity. It trades about 0.06 of its potential returns per unit of risk. Strategic Advisers Fidelity is currently generating about 0.14 per unit of risk. If you would invest 11,317 in Steel Dynamics on September 4, 2024 and sell it today you would earn a total of 3,164 from holding Steel Dynamics or generate 27.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steel Dynamics vs. Strategic Advisers Fidelity
Performance |
| Timeline |
| Steel Dynamics |
| Strategic Advisers |
Steel Dynamics and Strategic Advisers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and Strategic Advisers
The main advantage of trading using opposite Steel Dynamics and Strategic Advisers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, Strategic Advisers 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 Strategic Advisers will offset losses from the drop in Strategic Advisers' 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 |
| Strategic Advisers vs. Virtus Convertible | Strategic Advisers vs. Rationalpier 88 Convertible | Strategic Advisers vs. Lord Abbett Convertible | Strategic Advisers vs. Calamos Dynamic Convertible |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| 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 | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |