Correlation Between Steel Dynamics and Bonava AB
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By analyzing existing cross correlation between Steel Dynamics and Bonava AB, you can compare the effects of market volatilities on Steel Dynamics and Bonava AB 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 Bonava AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Bonava AB.
Diversification Opportunities for Steel Dynamics and Bonava AB
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Steel and Bonava is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Bonava AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonava AB 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 Bonava AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonava AB has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Bonava AB go up and down completely randomly.
Pair Corralation between Steel Dynamics and Bonava AB
Given the investment horizon of 90 days Steel Dynamics is expected to generate 0.93 times more return on investment than Bonava AB. However, Steel Dynamics is 1.07 times less risky than Bonava AB. It trades about 0.15 of its potential returns per unit of risk. Bonava AB is currently generating about 0.04 per unit of risk. If you would invest 11,034 in Steel Dynamics on September 9, 2024 and sell it today you would earn a total of 2,656 from holding Steel Dynamics or generate 24.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.48% |
Values | Daily Returns |
Steel Dynamics vs. Bonava AB
Performance |
Timeline |
Steel Dynamics |
Bonava AB |
Steel Dynamics and Bonava AB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Steel Dynamics and Bonava AB
The main advantage of trading using opposite Steel Dynamics and Bonava AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, Bonava AB 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 Bonava AB will offset losses from the drop in Bonava AB's 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 |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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