Correlation Between Worthington Steel and ENELIM

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

By analyzing existing cross correlation between Worthington Steel and ENELIM 71 14 OCT 27, you can compare the effects of market volatilities on Worthington Steel and ENELIM 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 ENELIM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worthington Steel and ENELIM.

Diversification Opportunities for Worthington Steel and ENELIM

0.43

Correlation Coefficient

Worthington Steel  ENELIM

Very weak diversification

The 3 months correlation between Worthington and ENELIM is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Worthington Steel and ENELIM 71 14 OCT 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENELIM 71 14 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 ENELIM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENELIM 71 14 has no effect on the direction of Worthington Steel i.e., Worthington Steel and ENELIM go up and down completely randomly.

Pair Corralation between Worthington Steel and ENELIM

Allowing for the 90-day total investment horizon Worthington Steel is expected to under-perform the ENELIM. In addition to that, Worthington Steel is 2.28 times more volatile than ENELIM 71 14 OCT 27. It trades about -0.03 of its total potential returns per unit of risk. ENELIM 71 14 OCT 27 is currently generating about -0.03 per unit of volatility. If you would invest  10,665  in ENELIM 71 14 OCT 27 on October 9, 2024 and sell it today you would lose (156.00) from holding ENELIM 71 14 OCT 27 or give up 1.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	40.98%
Values	Daily Returns

Worthington Steel  vs.  ENELIM 71 14 OCT 27

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.

ENELIM 71 14

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ENELIM 71 14 OCT 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ENELIM is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Worthington Steel and ENELIM

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

The idea behind Worthington Steel and ENELIM 71 14 OCT 27 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.