Correlation Between Steel Dynamics and OceanPact Servios

Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and OceanPact Servios 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 Steel Dynamics and OceanPact Servios into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Steel Dynamics and OceanPact Servios Martimos, you can compare the effects of market volatilities on Steel Dynamics and OceanPact Servios 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 Steel Dynamics with a short position of OceanPact Servios. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and OceanPact Servios.

Diversification Opportunities for Steel Dynamics and OceanPact Servios

-0.76

Correlation Coefficient

Steel Dynamics  OceanPact Servios

Pay attention - limited upside

The 3 months correlation between Steel and OceanPact is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and OceanPact Servios Martimos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OceanPact Servios and Steel Dynamics 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 Steel Dynamics are associated (or correlated) with OceanPact Servios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OceanPact Servios has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and OceanPact Servios go up and down completely randomly.

Pair Corralation between Steel Dynamics and OceanPact Servios

Given the investment horizon of 90 days Steel Dynamics is expected to generate 1.27 times more return on investment than OceanPact Servios. However, Steel Dynamics is 1.27 times more volatile than OceanPact Servios Martimos. It trades about 0.17 of its potential returns per unit of risk. OceanPact Servios Martimos is currently generating about -0.19 per unit of risk. If you would invest  11,091  in Steel Dynamics on September 5, 2024 and sell it today you would earn a total of  3,229  from holding Steel Dynamics or generate 29.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Steel Dynamics  vs.  OceanPact Servios Martimos

Steel Dynamics

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Steel Dynamics are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile essential indicators, Steel Dynamics exhibited solid returns over the last few months and may actually be approaching a breakup point.

OceanPact Servios

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OceanPact Servios Martimos has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Steel Dynamics and OceanPact Servios

The main advantage of trading using opposite Steel Dynamics and OceanPact Servios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, OceanPact Servios 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 OceanPact Servios will offset losses from the drop in OceanPact Servios' long position.

The idea behind Steel Dynamics and OceanPact Servios Martimos pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.