Correlation Between Worthington Steel and Huadi International
Can any of the company-specific risk be diversified away by investing in both Worthington Steel and Huadi International 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 Huadi International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worthington Steel and Huadi International Group, you can compare the effects of market volatilities on Worthington Steel and Huadi International 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 Huadi International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worthington Steel and Huadi International.
Diversification Opportunities for Worthington Steel and Huadi International
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Worthington and Huadi is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Worthington Steel and Huadi International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huadi International 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 Huadi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huadi International has no effect on the direction of Worthington Steel i.e., Worthington Steel and Huadi International go up and down completely randomly.
Pair Corralation between Worthington Steel and Huadi International
Allowing for the 90-day total investment horizon Worthington Steel is expected to generate 2.02 times more return on investment than Huadi International. However, Worthington Steel is 2.02 times more volatile than Huadi International Group. It trades about 0.19 of its potential returns per unit of risk. Huadi International Group is currently generating about -0.01 per unit of risk. If you would invest 3,980 in Worthington Steel on August 27, 2024 and sell it today you would earn a total of 534.00 from holding Worthington Steel or generate 13.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Worthington Steel vs. Huadi International Group
Performance |
| Timeline |
| Worthington Steel |
| Huadi International |
Worthington Steel and Huadi International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worthington Steel and Huadi International
The main advantage of trading using opposite Worthington Steel and Huadi International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worthington Steel position performs unexpectedly, Huadi International 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 Huadi International will offset losses from the drop in Huadi International's long position.| Worthington Steel vs. US Global Investors | Worthington Steel vs. Neogen | Worthington Steel vs. Alvarium Tiedemann Holdings | Worthington Steel vs. Freedom Holding Corp |
| Huadi International vs. Labrador Gold Corp | Huadi International vs. Aurion Resources | Huadi International vs. Puma Exploration | Huadi International vs. Golden Star Resource |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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