Correlation Between Steel Dynamics and NORSK
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By analyzing existing cross correlation between Steel Dynamics and NORSK HYDRO A, you can compare the effects of market volatilities on Steel Dynamics and NORSK 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 NORSK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and NORSK.
Diversification Opportunities for Steel Dynamics and NORSK
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Steel and NORSK is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and NORSK HYDRO A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORSK HYDRO A 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 NORSK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORSK HYDRO A has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and NORSK go up and down completely randomly.
Pair Corralation between Steel Dynamics and NORSK
Given the investment horizon of 90 days Steel Dynamics is expected to generate 8.8 times more return on investment than NORSK. However, Steel Dynamics is 8.8 times more volatile than NORSK HYDRO A. It trades about 0.16 of its potential returns per unit of risk. NORSK HYDRO A is currently generating about 0.07 per unit of risk. If you would invest 13,050 in Steel Dynamics on September 1, 2024 and sell it today you would earn a total of 1,477 from holding Steel Dynamics or generate 11.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Steel Dynamics vs. NORSK HYDRO A
Performance |
| Timeline |
| Steel Dynamics |
| NORSK HYDRO A |
Steel Dynamics and NORSK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and NORSK
The main advantage of trading using opposite Steel Dynamics and NORSK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, NORSK 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 NORSK will offset losses from the drop in NORSK'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 |
| NORSK vs. Magnite | NORSK vs. National CineMedia | NORSK vs. WiMi Hologram Cloud | NORSK vs. Dolphin Entertainment |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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