Correlation Between TRADEDOUBLER and Schnitzer Steel

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Can any of the company-specific risk be diversified away by investing in both TRADEDOUBLER and Schnitzer Steel 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 TRADEDOUBLER and Schnitzer Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRADEDOUBLER AB SK and Schnitzer Steel Industries, you can compare the effects of market volatilities on TRADEDOUBLER and Schnitzer Steel 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 TRADEDOUBLER with a short position of Schnitzer Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRADEDOUBLER and Schnitzer Steel.

Diversification Opportunities for TRADEDOUBLER and Schnitzer Steel

-0.2
  Correlation Coefficient

Good diversification

The 3 months correlation between TRADEDOUBLER and Schnitzer is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding TRADEDOUBLER AB SK and Schnitzer Steel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schnitzer Steel Indu and TRADEDOUBLER 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 TRADEDOUBLER AB SK are associated (or correlated) with Schnitzer Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schnitzer Steel Indu has no effect on the direction of TRADEDOUBLER i.e., TRADEDOUBLER and Schnitzer Steel go up and down completely randomly.

Pair Corralation between TRADEDOUBLER and Schnitzer Steel

Assuming the 90 days horizon TRADEDOUBLER AB SK is expected to generate 1.1 times more return on investment than Schnitzer Steel. However, TRADEDOUBLER is 1.1 times more volatile than Schnitzer Steel Industries. It trades about 0.01 of its potential returns per unit of risk. Schnitzer Steel Industries is currently generating about -0.03 per unit of risk. If you would invest  37.00  in TRADEDOUBLER AB SK on October 12, 2024 and sell it today you would lose (7.00) from holding TRADEDOUBLER AB SK or give up 18.92% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

TRADEDOUBLER AB SK  vs.  Schnitzer Steel Industries

 Performance 
       Timeline  
TRADEDOUBLER AB SK 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in TRADEDOUBLER AB SK are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TRADEDOUBLER reported solid returns over the last few months and may actually be approaching a breakup point.
Schnitzer Steel Indu 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Schnitzer Steel Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

TRADEDOUBLER and Schnitzer Steel Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with TRADEDOUBLER and Schnitzer Steel

The main advantage of trading using opposite TRADEDOUBLER and Schnitzer Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRADEDOUBLER position performs unexpectedly, Schnitzer Steel 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 Schnitzer Steel will offset losses from the drop in Schnitzer Steel's long position.
The idea behind TRADEDOUBLER AB SK and Schnitzer Steel Industries pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Transaction History module to view history of all your transactions and understand their impact on performance.

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