Correlation Between Skillful Craftsman and Worthington Steel

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

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

Diversification Opportunities for Skillful Craftsman and Worthington Steel

-0.34

Correlation Coefficient

Skillful Craftsman  Worthington Steel

Very good diversification

The 3 months correlation between Skillful and Worthington is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Skillful Craftsman Education and Worthington Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worthington Steel and Skillful Craftsman 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 Skillful Craftsman Education are associated (or correlated) with Worthington Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worthington Steel has no effect on the direction of Skillful Craftsman i.e., Skillful Craftsman and Worthington Steel go up and down completely randomly.

Pair Corralation between Skillful Craftsman and Worthington Steel

Given the investment horizon of 90 days Skillful Craftsman Education is expected to generate 2.15 times more return on investment than Worthington Steel. However, Skillful Craftsman is 2.15 times more volatile than Worthington Steel. It trades about -0.08 of its potential returns per unit of risk. Worthington Steel is currently generating about -0.36 per unit of risk. If you would invest  104.00  in Skillful Craftsman Education on September 20, 2024 and sell it today you would lose (8.00) from holding Skillful Craftsman Education or give up 7.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Skillful Craftsman Education  vs.  Worthington Steel

Skillful Craftsman

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Skillful Craftsman Education has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Worthington Steel

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Worthington Steel are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Worthington Steel may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Skillful Craftsman and Worthington Steel

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

The idea behind Skillful Craftsman Education and Worthington Steel 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.