Correlation Between Steel Dynamics and Jutal Offshore
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and Jutal Offshore 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 Jutal Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and Jutal Offshore Oil, you can compare the effects of market volatilities on Steel Dynamics and Jutal Offshore 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 Jutal Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Jutal Offshore.
Diversification Opportunities for Steel Dynamics and Jutal Offshore
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Steel and Jutal is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Jutal Offshore Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jutal Offshore Oil 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 Jutal Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jutal Offshore Oil has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Jutal Offshore go up and down completely randomly.
Pair Corralation between Steel Dynamics and Jutal Offshore
If you would invest 13,572 in Steel Dynamics on August 27, 2024 and sell it today you would earn a total of 926.00 from holding Steel Dynamics or generate 6.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steel Dynamics vs. Jutal Offshore Oil
Performance |
| Timeline |
| Steel Dynamics |
| Jutal Offshore Oil |
Steel Dynamics and Jutal Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and Jutal Offshore
The main advantage of trading using opposite Steel Dynamics and Jutal Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, Jutal Offshore 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 Jutal Offshore will offset losses from the drop in Jutal Offshore's long position.The idea behind Steel Dynamics and Jutal Offshore Oil pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Jutal Offshore vs. Expro Group Holdings | Jutal Offshore vs. ChampionX | Jutal Offshore vs. Ranger Energy Services | Jutal Offshore vs. Cactus Inc |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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