Correlation Between Steel Dynamics and Hartford Total
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and Hartford Total 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 Hartford Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and The Hartford Total, you can compare the effects of market volatilities on Steel Dynamics and Hartford Total 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 Hartford Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Hartford Total.
Diversification Opportunities for Steel Dynamics and Hartford Total
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Steel and Hartford is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and The Hartford Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Total 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 Hartford Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Total has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Hartford Total go up and down completely randomly.
Pair Corralation between Steel Dynamics and Hartford Total
Given the investment horizon of 90 days Steel Dynamics is expected to generate 10.94 times more return on investment than Hartford Total. However, Steel Dynamics is 10.94 times more volatile than The Hartford Total. It trades about 0.14 of its potential returns per unit of risk. The Hartford Total is currently generating about 0.11 per unit of risk. If you would invest 13,358 in Steel Dynamics on September 3, 2024 and sell it today you would earn a total of 1,169 from holding Steel Dynamics or generate 8.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steel Dynamics vs. The Hartford Total
Performance |
| Timeline |
| Steel Dynamics |
| Hartford Total |
Steel Dynamics and Hartford Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and Hartford Total
The main advantage of trading using opposite Steel Dynamics and Hartford Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, Hartford Total 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 Hartford Total will offset losses from the drop in Hartford Total'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 |
| Hartford Total vs. Needham Aggressive Growth | Hartford Total vs. Artisan High Income | Hartford Total vs. Siit High Yield | Hartford Total vs. Vanguard Star Fund |
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 Positions Ratings module to 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.
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