Correlation Between NUCOR and Rackspace Technology
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By analyzing existing cross correlation between NUCOR P 52 and Rackspace Technology, you can compare the effects of market volatilities on NUCOR and Rackspace Technology 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 NUCOR with a short position of Rackspace Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of NUCOR and Rackspace Technology.
Diversification Opportunities for NUCOR and Rackspace Technology
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NUCOR and Rackspace is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding NUCOR P 52 and Rackspace Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rackspace Technology and NUCOR 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 NUCOR P 52 are associated (or correlated) with Rackspace Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rackspace Technology has no effect on the direction of NUCOR i.e., NUCOR and Rackspace Technology go up and down completely randomly.
Pair Corralation between NUCOR and Rackspace Technology
Assuming the 90 days trading horizon NUCOR P 52 is expected to under-perform the Rackspace Technology. But the bond apears to be less risky and, when comparing its historical volatility, NUCOR P 52 is 2.45 times less risky than Rackspace Technology. The bond trades about -0.02 of its potential returns per unit of risk. The Rackspace Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 172.00 in Rackspace Technology on September 4, 2024 and sell it today you would earn a total of 76.00 from holding Rackspace Technology or generate 44.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 29.96% |
| Values | Daily Returns |
NUCOR P 52 vs. Rackspace Technology
Performance |
| Timeline |
| NUCOR P 52 |
| Rackspace Technology |
NUCOR and Rackspace Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NUCOR and Rackspace Technology
The main advantage of trading using opposite NUCOR and Rackspace Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NUCOR position performs unexpectedly, Rackspace Technology 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 Rackspace Technology will offset losses from the drop in Rackspace Technology's long position.The idea behind NUCOR P 52 and Rackspace Technology 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.| Rackspace Technology vs. GigaCloud Technology Class | Rackspace Technology vs. Alarum Technologies | Rackspace Technology vs. Stem Inc | Rackspace Technology vs. Pagaya Technologies |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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