Correlation Between Steel Dynamics and Silver Predator
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and Silver Predator 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 Silver Predator into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and Silver Predator Corp, you can compare the effects of market volatilities on Steel Dynamics and Silver Predator 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 Silver Predator. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Silver Predator.
Diversification Opportunities for Steel Dynamics and Silver Predator
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Steel and Silver is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Silver Predator Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Predator Corp 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 Silver Predator. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Predator Corp has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Silver Predator go up and down completely randomly.
Pair Corralation between Steel Dynamics and Silver Predator
Given the investment horizon of 90 days Steel Dynamics is expected to generate 1.31 times less return on investment than Silver Predator. But when comparing it to its historical volatility, Steel Dynamics is 2.82 times less risky than Silver Predator. It trades about 0.05 of its potential returns per unit of risk. Silver Predator Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Silver Predator Corp on September 12, 2024 and sell it today you would lose (0.50) from holding Silver Predator Corp or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Steel Dynamics vs. Silver Predator Corp
Performance |
| Timeline |
| Steel Dynamics |
| Silver Predator Corp |
Steel Dynamics and Silver Predator Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and Silver Predator
The main advantage of trading using opposite Steel Dynamics and Silver Predator positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, Silver Predator 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 Silver Predator will offset losses from the drop in Silver Predator'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 |
| Silver Predator vs. Lion One Metals | Silver Predator vs. Nicola Mining | Silver Predator vs. Caribbean Utilities | Silver Predator vs. Primaris Retail RE |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |