Correlation Between Idaho Strategic and Nucor Corp

Can any of the company-specific risk be diversified away by investing in both Idaho Strategic and Nucor Corp 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 Idaho Strategic and Nucor Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Idaho Strategic Resources and Nucor Corp, you can compare the effects of market volatilities on Idaho Strategic and Nucor Corp 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 Idaho Strategic with a short position of Nucor Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Idaho Strategic and Nucor Corp.

Diversification Opportunities for Idaho Strategic and Nucor Corp

0.31

Correlation Coefficient

Idaho Strategic  Nucor Corp

Weak diversification

The 3 months correlation between Idaho and Nucor is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Idaho Strategic Resources and Nucor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nucor Corp and Idaho Strategic 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 Idaho Strategic Resources are associated (or correlated) with Nucor Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nucor Corp has no effect on the direction of Idaho Strategic i.e., Idaho Strategic and Nucor Corp go up and down completely randomly.

Pair Corralation between Idaho Strategic and Nucor Corp

Considering the 90-day investment horizon Idaho Strategic Resources is expected to generate 1.92 times more return on investment than Nucor Corp. However, Idaho Strategic is 1.92 times more volatile than Nucor Corp. It trades about 0.08 of its potential returns per unit of risk. Nucor Corp is currently generating about -0.03 per unit of risk. If you would invest  505.00  in Idaho Strategic Resources on September 21, 2024 and sell it today you would earn a total of  544.00  from holding Idaho Strategic Resources or generate 107.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Idaho Strategic Resources  vs.  Nucor Corp

Idaho Strategic Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Idaho Strategic Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Nucor Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nucor Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Idaho Strategic and Nucor Corp

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

The idea behind Idaho Strategic Resources and Nucor Corp 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.