Correlation Between Steel Dynamics and ZKB Silver
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and ZKB Silver 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 ZKB Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and ZKB Silver ETF, you can compare the effects of market volatilities on Steel Dynamics and ZKB Silver 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 ZKB Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and ZKB Silver.
Diversification Opportunities for Steel Dynamics and ZKB Silver
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Steel and ZKB is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and ZKB Silver ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZKB Silver ETF 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 ZKB Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZKB Silver ETF has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and ZKB Silver go up and down completely randomly.
Pair Corralation between Steel Dynamics and ZKB Silver
Given the investment horizon of 90 days Steel Dynamics is expected to under-perform the ZKB Silver. In addition to that, Steel Dynamics is 1.06 times more volatile than ZKB Silver ETF. It trades about -0.29 of its total potential returns per unit of risk. ZKB Silver ETF is currently generating about 0.15 per unit of volatility. If you would invest 7,731 in ZKB Silver ETF on September 12, 2024 and sell it today you would earn a total of 364.00 from holding ZKB Silver ETF or generate 4.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Steel Dynamics vs. ZKB Silver ETF
Performance |
| Timeline |
| Steel Dynamics |
| ZKB Silver ETF |
Steel Dynamics and ZKB Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and ZKB Silver
The main advantage of trading using opposite Steel Dynamics and ZKB Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, ZKB Silver 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 ZKB Silver will offset losses from the drop in ZKB Silver'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 |
| ZKB Silver vs. ZKB Silver ETF | ZKB Silver vs. ZKB Gold ETF | ZKB Silver vs. ZKB Gold ETF | ZKB Silver vs. ZKB Platinum ETF |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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