Correlation Between Worthington Steel and Mesabi Trust
Can any of the company-specific risk be diversified away by investing in both Worthington Steel and Mesabi Trust 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 Mesabi Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worthington Steel and Mesabi Trust, you can compare the effects of market volatilities on Worthington Steel and Mesabi Trust 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 Mesabi Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worthington Steel and Mesabi Trust.
Diversification Opportunities for Worthington Steel and Mesabi Trust
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Worthington and Mesabi is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Worthington Steel and Mesabi Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mesabi Trust 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 Mesabi Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mesabi Trust has no effect on the direction of Worthington Steel i.e., Worthington Steel and Mesabi Trust go up and down completely randomly.
Pair Corralation between Worthington Steel and Mesabi Trust
Allowing for the 90-day total investment horizon Worthington Steel is expected to generate 1.41 times more return on investment than Mesabi Trust. However, Worthington Steel is 1.41 times more volatile than Mesabi Trust. It trades about 0.08 of its potential returns per unit of risk. Mesabi Trust is currently generating about 0.05 per unit of risk. If you would invest 2,461 in Worthington Steel on September 2, 2024 and sell it today you would earn a total of 2,023 from holding Worthington Steel or generate 82.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 51.41% |
| Values | Daily Returns |
Worthington Steel vs. Mesabi Trust
Performance |
| Timeline |
| Worthington Steel |
| Mesabi Trust |
Worthington Steel and Mesabi Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worthington Steel and Mesabi Trust
The main advantage of trading using opposite Worthington Steel and Mesabi Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worthington Steel position performs unexpectedly, Mesabi Trust 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 Mesabi Trust will offset losses from the drop in Mesabi Trust's long position.| Worthington Steel vs. Aspen Insurance Holdings | Worthington Steel vs. Nike Inc | Worthington Steel vs. Old Republic International | Worthington Steel vs. Sable Offshore Corp |
| Mesabi Trust vs. Fortitude Gold Corp | Mesabi Trust vs. New Gold | Mesabi Trust vs. Galiano Gold | Mesabi Trust vs. GoldMining |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |