Correlation Between Steel Dynamics and Sunsweet Public
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and Sunsweet Public 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 Sunsweet Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and Sunsweet Public, you can compare the effects of market volatilities on Steel Dynamics and Sunsweet Public 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 Sunsweet Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Sunsweet Public.
Diversification Opportunities for Steel Dynamics and Sunsweet Public
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Steel and Sunsweet is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Sunsweet Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunsweet Public 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 Sunsweet Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunsweet Public has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Sunsweet Public go up and down completely randomly.
Pair Corralation between Steel Dynamics and Sunsweet Public
Given the investment horizon of 90 days Steel Dynamics is expected to generate 0.89 times more return on investment than Sunsweet Public. However, Steel Dynamics is 1.13 times less risky than Sunsweet Public. It trades about 0.06 of its potential returns per unit of risk. Sunsweet Public is currently generating about 0.03 per unit of risk. If you would invest 10,823 in Steel Dynamics on September 4, 2024 and sell it today you would earn a total of 3,658 from holding Steel Dynamics or generate 33.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.9% |
| Values | Daily Returns |
Steel Dynamics vs. Sunsweet Public
Performance |
| Timeline |
| Steel Dynamics |
| Sunsweet Public |
Steel Dynamics and Sunsweet Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and Sunsweet Public
The main advantage of trading using opposite Steel Dynamics and Sunsweet Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, Sunsweet Public 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 Sunsweet Public will offset losses from the drop in Sunsweet Public'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 |
| Sunsweet Public vs. Muang Thai Insurance | Sunsweet Public vs. Indara Insurance Public | Sunsweet Public vs. Thai Nakarin Hospital | Sunsweet Public vs. Healthlead Public |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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