Correlation Between Worthington Steel and 49326EEN9

Can any of the company-specific risk be diversified away by investing in both Worthington Steel and 49326EEN9 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 49326EEN9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Worthington Steel and KEY 4789 01 JUN 33, you can compare the effects of market volatilities on Worthington Steel and 49326EEN9 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 49326EEN9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worthington Steel and 49326EEN9.

Diversification Opportunities for Worthington Steel and 49326EEN9

0.28

Correlation Coefficient

Worthington Steel  49326EEN9

Modest diversification

The 3 months correlation between Worthington and 49326EEN9 is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Worthington Steel and KEY 4789 01 JUN 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEY 4789 01 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 49326EEN9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEY 4789 01 has no effect on the direction of Worthington Steel i.e., Worthington Steel and 49326EEN9 go up and down completely randomly.

Pair Corralation between Worthington Steel and 49326EEN9

Allowing for the 90-day total investment horizon Worthington Steel is expected to under-perform the 49326EEN9. In addition to that, Worthington Steel is 1.25 times more volatile than KEY 4789 01 JUN 33. It trades about -0.28 of its total potential returns per unit of risk. KEY 4789 01 JUN 33 is currently generating about -0.16 per unit of volatility. If you would invest  9,492  in KEY 4789 01 JUN 33 on October 7, 2024 and sell it today you would lose (1,530) from holding KEY 4789 01 JUN 33 or give up 16.12% of portfolio value over 90 days.

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

Worthington Steel  vs.  KEY 4789 01 JUN 33

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 recent stock price uproar, may contribute to short-horizon losses for the private investors.

KEY 4789 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KEY 4789 01 JUN 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for KEY 4789 01 JUN 33 investors.

Pair Trading with Worthington Steel and 49326EEN9

The main advantage of trading using opposite Worthington Steel and 49326EEN9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worthington Steel position performs unexpectedly, 49326EEN9 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 49326EEN9 will offset losses from the drop in 49326EEN9's long position.

The idea behind Worthington Steel and KEY 4789 01 JUN 33 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.