Correlation Between Worthington Steel and 43118DAA8

Can any of the company-specific risk be diversified away by investing in both Worthington Steel and 43118DAA8 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 43118DAA8 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Worthington Steel and US43118DAA81, you can compare the effects of market volatilities on Worthington Steel and 43118DAA8 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 43118DAA8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worthington Steel and 43118DAA8.

Diversification Opportunities for Worthington Steel and 43118DAA8

-0.02

Correlation Coefficient

Worthington Steel  43118DAA8

Good diversification

The 3 months correlation between Worthington and 43118DAA8 is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Worthington Steel and US43118DAA81 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US43118DAA81 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 43118DAA8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US43118DAA81 has no effect on the direction of Worthington Steel i.e., Worthington Steel and 43118DAA8 go up and down completely randomly.

Pair Corralation between Worthington Steel and 43118DAA8

Allowing for the 90-day total investment horizon Worthington Steel is expected to generate 0.47 times more return on investment than 43118DAA8. However, Worthington Steel is 2.11 times less risky than 43118DAA8. It trades about -0.22 of its potential returns per unit of risk. US43118DAA81 is currently generating about -0.14 per unit of risk. If you would invest  3,254  in Worthington Steel on October 27, 2024 and sell it today you would lose (275.00) from holding Worthington Steel or give up 8.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	47.37%
Values	Daily Returns

Worthington Steel  vs.  US43118DAA81

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

US43118DAA81

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US43118DAA81 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for US43118DAA81 investors.

Pair Trading with Worthington Steel and 43118DAA8

The main advantage of trading using opposite Worthington Steel and 43118DAA8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worthington Steel position performs unexpectedly, 43118DAA8 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 43118DAA8 will offset losses from the drop in 43118DAA8's long position.

The idea behind Worthington Steel and US43118DAA81 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .