Correlation Between Worthington Steel and Centerra Gold
Can any of the company-specific risk be diversified away by investing in both Worthington Steel and Centerra Gold 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 Worthington Steel and Centerra Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worthington Steel and Centerra Gold, you can compare the effects of market volatilities on Worthington Steel and Centerra Gold 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 Worthington Steel with a short position of Centerra Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worthington Steel and Centerra Gold.
Diversification Opportunities for Worthington Steel and Centerra Gold
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Worthington and Centerra is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Worthington Steel and Centerra Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centerra Gold and Worthington Steel 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 Worthington Steel are associated (or correlated) with Centerra Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centerra Gold has no effect on the direction of Worthington Steel i.e., Worthington Steel and Centerra Gold go up and down completely randomly.
Pair Corralation between Worthington Steel and Centerra Gold
Allowing for the 90-day total investment horizon Worthington Steel is expected to generate 1.49 times more return on investment than Centerra Gold. However, Worthington Steel is 1.49 times more volatile than Centerra Gold. It trades about 0.07 of its potential returns per unit of risk. Centerra Gold is currently generating about 0.02 per unit of risk. If you would invest 2,708 in Worthington Steel on August 26, 2024 and sell it today you would earn a total of 1,806 from holding Worthington Steel or generate 66.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Worthington Steel vs. Centerra Gold
Performance |
| Timeline |
| Worthington Steel |
| Centerra Gold |
Worthington Steel and Centerra Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worthington Steel and Centerra Gold
The main advantage of trading using opposite Worthington Steel and Centerra Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worthington Steel position performs unexpectedly, Centerra Gold 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 Centerra Gold will offset losses from the drop in Centerra Gold's long position.| Worthington Steel vs. Everus Construction Group | Worthington Steel vs. SkyWest | Worthington Steel vs. Warner Music Group | Worthington Steel vs. Mesa Air Group |
| Centerra Gold vs. Gold Fields Ltd | Centerra Gold vs. Eldorado Gold Corp | Centerra Gold vs. Osisko Gold Ro | Centerra Gold vs. SSR Mining |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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