Correlation Between Universal Stainless and Webco Industries
Can any of the company-specific risk be diversified away by investing in both Universal Stainless and Webco Industries 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 Webco Industries 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 Webco Industries, you can compare the effects of market volatilities on Universal Stainless and Webco Industries 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 Webco Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Stainless and Webco Industries.
Diversification Opportunities for Universal Stainless and Webco Industries
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Universal and Webco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Universal Stainless Alloy and Webco Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Webco Industries 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 Webco Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Webco Industries has no effect on the direction of Universal Stainless i.e., Universal Stainless and Webco Industries go up and down completely randomly.
Pair Corralation between Universal Stainless and Webco Industries
If you would invest 4,390 in Universal Stainless Alloy on November 1, 2024 and sell it today you would earn a total of 109.00 from holding Universal Stainless Alloy or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.75% |
| Values | Daily Returns |
Universal Stainless Alloy vs. Webco Industries
Performance |
| Timeline |
| Universal Stainless Alloy |
| Webco Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Universal Stainless and Webco Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Stainless and Webco Industries
The main advantage of trading using opposite Universal Stainless and Webco Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Stainless position performs unexpectedly, Webco Industries 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 Webco Industries will offset losses from the drop in Webco Industries' long position.| Universal Stainless vs. Olympic Steel | Universal Stainless vs. Outokumpu Oyj ADR | Universal Stainless vs. Usinas Siderurgicas de | Universal Stainless vs. POSCO Holdings |
| Webco Industries vs. Algoma Steel Group | Webco Industries vs. Synalloy | Webco Industries vs. Olympic Steel | Webco Industries vs. Universal Stainless Alloy |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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