Correlation Between STEEL DYNAMICS and CHINA STATE

Can any of the company-specific risk be diversified away by investing in both STEEL DYNAMICS and CHINA STATE 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 CHINA STATE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between STEEL DYNAMICS and CHINA STATE STRU, you can compare the effects of market volatilities on STEEL DYNAMICS and CHINA STATE 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 CHINA STATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of STEEL DYNAMICS and CHINA STATE.

Diversification Opportunities for STEEL DYNAMICS and CHINA STATE

0.0

Correlation Coefficient

STEEL DYNAMICS  CHINA STATE

Pay attention - limited upside

The 3 months correlation between STEEL and CHINA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding STEEL DYNAMICS and CHINA STATE STRU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA STATE STRU 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 CHINA STATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA STATE STRU has no effect on the direction of STEEL DYNAMICS i.e., STEEL DYNAMICS and CHINA STATE go up and down completely randomly.

Pair Corralation between STEEL DYNAMICS and CHINA STATE

If you would invest  11,055  in STEEL DYNAMICS on October 22, 2024 and sell it today you would earn a total of  1,053  from holding STEEL DYNAMICS or generate 9.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

STEEL DYNAMICS  vs.  CHINA STATE STRU

STEEL DYNAMICS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days STEEL DYNAMICS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, STEEL DYNAMICS is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

CHINA STATE STRU

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHINA STATE STRU has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with STEEL DYNAMICS and CHINA STATE

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

The idea behind STEEL DYNAMICS and CHINA STATE STRU 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..