Correlation Between Steel Dynamics and SPDR Barclays
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By analyzing existing cross correlation between Steel Dynamics and SPDR Barclays 3 5, you can compare the effects of market volatilities on Steel Dynamics and SPDR Barclays 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 SPDR Barclays. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and SPDR Barclays.
Diversification Opportunities for Steel Dynamics and SPDR Barclays
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Steel and SPDR is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and SPDR Barclays 3 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Barclays 3 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 SPDR Barclays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Barclays 3 has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and SPDR Barclays go up and down completely randomly.
Pair Corralation between Steel Dynamics and SPDR Barclays
Given the investment horizon of 90 days Steel Dynamics is expected to generate 6.78 times more return on investment than SPDR Barclays. However, Steel Dynamics is 6.78 times more volatile than SPDR Barclays 3 5. It trades about 0.14 of its potential returns per unit of risk. SPDR Barclays 3 5 is currently generating about 0.14 per unit of risk. If you would invest 11,014 in Steel Dynamics on September 12, 2024 and sell it today you would earn a total of 2,442 from holding Steel Dynamics or generate 22.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Steel Dynamics vs. SPDR Barclays 3 5
Performance |
Timeline |
Steel Dynamics |
SPDR Barclays 3 |
Steel Dynamics and SPDR Barclays Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Steel Dynamics and SPDR Barclays
The main advantage of trading using opposite Steel Dynamics and SPDR Barclays positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, SPDR Barclays 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 SPDR Barclays will offset losses from the drop in SPDR Barclays' long position.Steel Dynamics vs. Cleveland Cliffs | Steel Dynamics vs. United States Steel | Steel Dynamics vs. ArcelorMittal SA ADR | Steel Dynamics vs. Reliance Steel Aluminum |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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