Correlation Between Steel Dynamics and LOWES
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By analyzing existing cross correlation between Steel Dynamics and LOWES PANIES INC, you can compare the effects of market volatilities on Steel Dynamics and LOWES 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 LOWES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and LOWES.
Diversification Opportunities for Steel Dynamics and LOWES
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Steel and LOWES is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and LOWES PANIES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOWES PANIES INC 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 LOWES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOWES PANIES INC has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and LOWES go up and down completely randomly.
Pair Corralation between Steel Dynamics and LOWES
Given the investment horizon of 90 days Steel Dynamics is expected to under-perform the LOWES. But the stock apears to be less risky and, when comparing its historical volatility, Steel Dynamics is 1.67 times less risky than LOWES. The stock trades about -0.3 of its potential returns per unit of risk. The LOWES PANIES INC is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 8,727 in LOWES PANIES INC on September 12, 2024 and sell it today you would lose (188.00) from holding LOWES PANIES INC or give up 2.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Steel Dynamics vs. LOWES PANIES INC
Performance |
| Timeline |
| Steel Dynamics |
| LOWES PANIES INC |
Steel Dynamics and LOWES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and LOWES
The main advantage of trading using opposite Steel Dynamics and LOWES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, LOWES 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 LOWES will offset losses from the drop in LOWES'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 |
| LOWES vs. Relx PLC ADR | LOWES vs. Bright Scholar Education | LOWES vs. Xponential Fitness | LOWES vs. Daily Journal Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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