Correlation Between Steel Dynamics and Seino Holdings
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and Seino Holdings 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 Seino Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and Seino Holdings Co, you can compare the effects of market volatilities on Steel Dynamics and Seino Holdings 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 Seino Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Seino Holdings.
Diversification Opportunities for Steel Dynamics and Seino Holdings
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Steel and Seino is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Seino Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seino Holdings 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 Seino Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seino Holdings has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Seino Holdings go up and down completely randomly.
Pair Corralation between Steel Dynamics and Seino Holdings
Given the investment horizon of 90 days Steel Dynamics is expected to generate 1.3 times more return on investment than Seino Holdings. However, Steel Dynamics is 1.3 times more volatile than Seino Holdings Co. It trades about 0.06 of its potential returns per unit of risk. Seino Holdings Co is currently generating about 0.04 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 Against |
| Strength | Insignificant |
| Accuracy | 98.64% |
| Values | Daily Returns |
Steel Dynamics vs. Seino Holdings Co
Performance |
| Timeline |
| Steel Dynamics |
| Seino Holdings |
Steel Dynamics and Seino Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and Seino Holdings
The main advantage of trading using opposite Steel Dynamics and Seino Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, Seino Holdings 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 Seino Holdings will offset losses from the drop in Seino Holdings' 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 |
| Seino Holdings vs. KENNAMETAL INC | Seino Holdings vs. Zijin Mining Group | Seino Holdings vs. LION ONE METALS | Seino Holdings vs. The Hanover Insurance |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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