Correlation Between Worthington Steel and Austin Gold

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

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

Diversification Opportunities for Worthington Steel and Austin Gold

0.76

Correlation Coefficient

Worthington Steel  Austin Gold

Poor diversification

The 3 months correlation between Worthington and Austin is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Worthington Steel and Austin Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austin Gold Corp and Worthington Steel 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 Worthington Steel are associated (or correlated) with Austin Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austin Gold Corp has no effect on the direction of Worthington Steel i.e., Worthington Steel and Austin Gold go up and down completely randomly.

Pair Corralation between Worthington Steel and Austin Gold

Allowing for the 90-day total investment horizon Worthington Steel is expected to under-perform the Austin Gold. But the stock apears to be less risky and, when comparing its historical volatility, Worthington Steel is 1.85 times less risky than Austin Gold. The stock trades about -0.21 of its potential returns per unit of risk. The Austin Gold Corp is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  187.00  in Austin Gold Corp on November 19, 2024 and sell it today you would lose (35.00) from holding Austin Gold Corp or give up 18.72% of portfolio value over 90 days.

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

Worthington Steel  vs.  Austin Gold Corp

Worthington Steel

Risk-Adjusted Performance

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 fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Austin Gold Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Austin Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak 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 Worthington Steel and Austin Gold

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

The idea behind Worthington Steel and Austin Gold 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.