Correlation Between 459506AQ4 and Worthington Steel

Can any of the company-specific risk be diversified away by investing in both 459506AQ4 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 459506AQ4 and Worthington Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between IFF 23 01 NOV 30 and Worthington Steel, you can compare the effects of market volatilities on 459506AQ4 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 459506AQ4 with a short position of Worthington Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of 459506AQ4 and Worthington Steel.

Diversification Opportunities for 459506AQ4 and Worthington Steel

0.26

Correlation Coefficient

459506AQ4  Worthington Steel

Modest diversification

The 3 months correlation between 459506AQ4 and Worthington is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding IFF 23 01 NOV 30 and Worthington Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worthington Steel and 459506AQ4 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 IFF 23 01 NOV 30 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 459506AQ4 i.e., 459506AQ4 and Worthington Steel go up and down completely randomly.

Pair Corralation between 459506AQ4 and Worthington Steel

Assuming the 90 days trading horizon IFF 23 01 NOV 30 is expected to generate 0.16 times more return on investment than Worthington Steel. However, IFF 23 01 NOV 30 is 6.31 times less risky than Worthington Steel. It trades about 0.04 of its potential returns per unit of risk. Worthington Steel is currently generating about -0.44 per unit of risk. If you would invest  8,623  in IFF 23 01 NOV 30 on October 9, 2024 and sell it today you would earn a total of  32.00  from holding IFF 23 01 NOV 30 or generate 0.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	78.95%
Values	Daily Returns

IFF 23 01 NOV 30  vs.  Worthington Steel

IFF 23 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IFF 23 01 NOV 30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 459506AQ4 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Worthington Steel

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with 459506AQ4 and Worthington Steel

The main advantage of trading using opposite 459506AQ4 and Worthington Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 459506AQ4 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 IFF 23 01 NOV 30 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.