Correlation Between Universal Stainless and Commercial Metals
Can any of the company-specific risk be diversified away by investing in both Universal Stainless and Commercial Metals 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 Universal Stainless and Commercial Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Stainless Alloy and Commercial Metals, you can compare the effects of market volatilities on Universal Stainless and Commercial Metals 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 Universal Stainless with a short position of Commercial Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Stainless and Commercial Metals.
Diversification Opportunities for Universal Stainless and Commercial Metals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Universal and Commercial is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Universal Stainless Alloy and Commercial Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial Metals and Universal Stainless 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 Universal Stainless Alloy are associated (or correlated) with Commercial Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial Metals has no effect on the direction of Universal Stainless i.e., Universal Stainless and Commercial Metals go up and down completely randomly.
Pair Corralation between Universal Stainless and Commercial Metals
If you would invest 4,895 in Commercial Metals on November 9, 2024 and sell it today you would earn a total of 119.00 from holding Commercial Metals or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Universal Stainless Alloy vs. Commercial Metals
Performance |
| Timeline |
| Universal Stainless Alloy |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Commercial Metals |
Universal Stainless and Commercial Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Stainless and Commercial Metals
The main advantage of trading using opposite Universal Stainless and Commercial Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Stainless position performs unexpectedly, Commercial Metals 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 Commercial Metals will offset losses from the drop in Commercial Metals' long position.| Universal Stainless vs. Olympic Steel | Universal Stainless vs. Outokumpu Oyj ADR | Universal Stainless vs. Usinas Siderurgicas de | Universal Stainless vs. POSCO Holdings |
| Commercial Metals vs. Olympic Steel | Commercial Metals vs. Steel Dynamics | Commercial Metals vs. Nucor Corp | Commercial Metals vs. POSCO Holdings |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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