Correlation Between Steel Dynamics and Calamos Market
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and Calamos Market 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 Calamos Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and Calamos Market Neutral, you can compare the effects of market volatilities on Steel Dynamics and Calamos Market 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 Calamos Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Calamos Market.
Diversification Opportunities for Steel Dynamics and Calamos Market
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Steel and Calamos is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Calamos Market Neutral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Market Neutral 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 Calamos Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Market Neutral has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Calamos Market go up and down completely randomly.
Pair Corralation between Steel Dynamics and Calamos Market
Given the investment horizon of 90 days Steel Dynamics is expected to generate 12.56 times more return on investment than Calamos Market. However, Steel Dynamics is 12.56 times more volatile than Calamos Market Neutral. It trades about 0.08 of its potential returns per unit of risk. Calamos Market Neutral is currently generating about 0.12 per unit of risk. If you would invest 11,334 in Steel Dynamics on December 29, 2024 and sell it today you would earn a total of 1,063 from holding Steel Dynamics or generate 9.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Steel Dynamics vs. Calamos Market Neutral
Performance |
Timeline |
Steel Dynamics |
Calamos Market Neutral |
Steel Dynamics and Calamos Market Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Steel Dynamics and Calamos Market
The main advantage of trading using opposite Steel Dynamics and Calamos Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, Calamos Market 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 Calamos Market will offset losses from the drop in Calamos Market'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 |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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