Correlation Between Steel Dynamics and World Fuel
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and World Fuel 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 World Fuel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and World Fuel Services, you can compare the effects of market volatilities on Steel Dynamics and World Fuel 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 World Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and World Fuel.
Diversification Opportunities for Steel Dynamics and World Fuel
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Steel and World is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and World Fuel Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Fuel Services 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 World Fuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Fuel Services has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and World Fuel go up and down completely randomly.
Pair Corralation between Steel Dynamics and World Fuel
If you would invest 12,623 in Steel Dynamics on September 3, 2024 and sell it today you would earn a total of 1,904 from holding Steel Dynamics or generate 15.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.8% |
| Values | Daily Returns |
Steel Dynamics vs. World Fuel Services
Performance |
| Timeline |
| Steel Dynamics |
| World Fuel Services |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Steel Dynamics and World Fuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and World Fuel
The main advantage of trading using opposite Steel Dynamics and World Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, World Fuel 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 World Fuel will offset losses from the drop in World Fuel'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 |
| World Fuel vs. Delek Logistics Partners | World Fuel vs. Star Gas Partners | World Fuel vs. Delek Energy | World Fuel vs. Par Pacific Holdings |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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