Correlation Between Steel Dynamics and IShares Core
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By analyzing existing cross correlation between Steel Dynamics and iShares Core SP, you can compare the effects of market volatilities on Steel Dynamics and IShares Core 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 IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and IShares Core.
Diversification Opportunities for Steel Dynamics and IShares Core
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Steel and IShares is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and iShares Core SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core SP 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 IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core SP has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and IShares Core go up and down completely randomly.
Pair Corralation between Steel Dynamics and IShares Core
Given the investment horizon of 90 days Steel Dynamics is expected to generate 4.41 times more return on investment than IShares Core. However, Steel Dynamics is 4.41 times more volatile than iShares Core SP. It trades about 0.11 of its potential returns per unit of risk. iShares Core SP is currently generating about 0.15 per unit of risk. If you would invest 13,358 in Steel Dynamics on September 5, 2024 and sell it today you would earn a total of 962.00 from holding Steel Dynamics or generate 7.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 86.36% |
| Values | Daily Returns |
Steel Dynamics vs. iShares Core SP
Performance |
| Timeline |
| Steel Dynamics |
| iShares Core SP |
Steel Dynamics and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and IShares Core
The main advantage of trading using opposite Steel Dynamics and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, IShares Core 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 IShares Core will offset losses from the drop in IShares Core'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 |
| IShares Core vs. iShares SP 500 | IShares Core vs. iShares MSCI ACWI | IShares Core vs. iShares NASDAQ 100 | IShares Core vs. iShares Healthcare Innovation |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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